GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/SIPC, today announced the placement of the Principal At-Risk Notes, with notional principal of $75,000,000, through a newly formed catastrophe bond, Queen Street Re VIII Limited, to benefit Munich Re. This is the eighth Queen Street cat bond to benefit Munich Re and the seventh overall cat bond issuance benefitting Munich Re since 2011.
Posts Tagged ‘Australia’
Here we review all of the CAT-i report events that appeared on GC Capital Ideas in the second half of 2012.
Floods in Eastern Australia, February 1: Ex-tropical cyclone Oswald tracked over parts of Queensland and New South Wales in eastern Australia between January 23 and January 30, resulting in widespread damage from flooding, severe storms and tornadoes. Floodwaters in some areas reached record levels, causing damage to thousands of properties and forcing widespread evacuations.
Update: Sandy, October 31: The full scope of Sandy’s impacts will still take a day or two to emerge. As storm surge recedes and those affected survey the damage, the last 24 hours have brought new reports of downed trees and power lines, with localized inland flooding, over an incredibly large area from the Mid-Atlantic to the Great Lakes to Atlantic Canada.
Tropical Storm Isaac, August 30: Tropical Storm Isaac now carries maximum sustained winds of 40 mph. It continues its slow drift, now to the north-northwest. Storm surge, inland flooding, and inland tornadoes remain as ongoing hazards with Isaac.
Here we gather recent GC Capital Ideas posts that focus on flood risk and flood events in the Asia Pacific region.
Floods in Eastern Australia: Ex-tropical cyclone Oswald tracked over parts of Queensland and New South Wales in eastern Australia between January 23 and January 30, resulting in widespread damage from flooding, severe storms and tornadoes.
Increased Flood Loss Potential: Making use of all available tools and practicing comprehensive exposure management will both strengthen (re)insurers’ ERM practices and allow them to make informed risk management and reinsurance decisions as they enter new markets. Certainly, flood risk is prevalent and increasing in almost every developing economy.
Flood Risks in Emerging Markets: Despite such important model limitations for earthquakes, the lack of modeling solutions for flood risks poses an even greater threat to (re)insurers. As illustrated by Figure 7 below, flood risk is poorly modeled at a global level by the three main modeling companies, particularly in developing countries where flooding is a regular occurrence.
Guy Carpenter Develops Database of Industrial Estates in China, Taiwan, Thailand and Indonesia: In 2011, Thailand experienced its worst flooding in years, which severely damaged and disrupted manufacturing operations in seven large industrial parks. Due in large part to the significant concentration of insured values in these parks, total insured loss from the 2011 flood is estimated to be in the range of USD15 to USD20 billion.
Guy Carpenter Asia Pacific Catastrophe Report 2012; Executive Summary: At the time we were publishing our 2011 Asia Pacific Catastrophe report, there was a growing realization that losses from the Thai flooding ongoing at the time were going to be significant. The Thai flood losses came at the end of a run of losses in the Asia Pacific region that were large, unprecedented in recent times and possibly unexpected by many market participants.
Thailand Flood 2011: Executive Summary: In 2011, Thailand experienced its worst flooding in years, leaving more than 800 people dead and causing severe damage across northern and central regions of the country. The floods, lasting a few months, severely damaged and disrupted manufacturing operations in Thailand. Flooding also forced seven huge industrial estates in central regions to close, causing damage to the industrial sector in the billions of U.S. dollars.
Ex-tropical cyclone Oswald tracked over parts of Queensland and New South Wales in eastern Australia between January 23 and January 30, resulting in widespread damage from flooding, severe storms and tornadoes. Floodwaters in some areas reached record levels, causing damage to thousands of properties and forcing widespread evacuations. A number of towns and cities were affected by severe flooding, including Brisbane, Ipswich, Bundaberg and Rockhampton. Bundaberg was particularly badly hit. The Insurance Council of Australia (ICA) has reported an estimated insured loss of AUD290 million (USD302 million) from the event as at 4pm on January 31. The 2013 flood event comes just two years after significant flooding hit Queensland in January 2011, which resulted in insured losses of around AUD2.4 billion (USD2.5 billion).
Guy Carpenter Asia-Pacific Climate Impact Centre Issues Predictions of Tropical Cyclone Activity in Australian Region
Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of Guy Carpenter & Company and City University of Hong Kong, issued its annual predictions for the 2012/2013 tropical cyclone season for the Australian region. The final forecast is for near-normal activity (12 tropical cyclones) for the region.
The rise of natural catastrophe insured losses in non-peak zones is evident when looking at the global distribution of losses over the last three years. Figure 1 shows 35 percent of insured losses between 2009 and 2011 were located in Asia while only 33 percent were in the United States. Australia and New Zealand also saw a marked increase in insured natural catastrophe losses during this period, with 19 percent of the total.
October 30, 2012: At the time we were publishing our 2011 Asia Pacific Catastrophe report, there was a growing realization that losses from the Thai flooding ongoing at the time were going to be significant. The Thai flood losses came at the end of a run of losses in the Asia Pacific region that were large, unprecedented in recent times and possibly unexpected by many market participants.
Over the last few years, the global (re)insurance sector has seen significant increases in cold spot catastrophe losses. This growing trend refers to exposures in territories that have historically been considered non-peak zones and are unmodeled or inadequately modeled. It is also a by-product of the increasingly global economy in which (re)insurers operate and the growing demand for (re)insurance in emerging and developing territories. These developments are expected to have a significant impact on the property catastrophe market, driving the need for a deeper analysis of risk in non-peak catastrophe zones. Indeed, developing a better understanding of underwriting risks in these new markets and overcoming the current catastrophe model limitations are key ingredients to future success.
In addition to the challenging macroeconomic environment, the sector has had to contend with heavy catastrophe losses over the last few years, particularly in areas not previously considered peak risks. Since 2010, (re)insurers have been hit by powerful earthquakes in Chile and New Zealand and devastating floods in Thailand and Australia. The result has been unexpectedly expensive “cold spot” losses at a time of increased insurance demand in regions such as emerging Asia and Latin America. Furthermore, the lack of catastrophe modeling solutions in emerging markets has raised concerns that (re)insurers do not currently possess an adequate understanding of the scale and nature of losses that can occur in these territories. In contrast to 2011, global catastrophe activity has been relatively light so far in 2012.
“Cold Spot” Catastrophe Losses Reveal Potential Emerging Market Risks, According to Guy Carpenter Report
Guy Carpenter published a new report that offers insight into catastrophe risks in developing economies and how they are likely to affect the (re)insurance sector as companies target growth opportunities in these new markets, including emerging Asia and Latin America.