Posts Tagged ‘cap mgmt’



November 29th, 2016

Chart: Which Capital Sources Will (Re)insurers Utilize in 2017?

Posted at 1:00 AM ET

Chart highlights the result of a survey taken of 107 insurance and reinsurance professionals conducted by Guy Carpenter at the 2016 annual meeting of the Property Casualty Insurers Association of America when asked which capital sources they will utilize more of in 2017.

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November 22nd, 2016

Reserving and Capital Setting: Conclusion

Posted at 1:00 AM ET

The obvious response to the issues emerging risks provide is to make sure reserves and capital position are more than robust enough for any eventuality - however remote - and then release them when the risks fail to materialize. But, there are many arguments against this as a practical strategy:

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November 21st, 2016

Reserving and Capital Setting: The Crystalization of Emerging Risks, Part II

Posted at 1:00 AM ET

The chart below attempts to illustrate the solvency calculation issue. Suppose the best estimate is 20 and the assessment from modeling is that the 1-in-200-year ultimate loss is 100. If all else stays the same and with the simplifying assumption that the yield curve stays flat, one can say that the sum of the 1-year solvency capital requirements (SCRs) approximated the difference between 100 and 20 (i.e. 80). Yet, because of the discounting, when in time the change in own funds is recognized, is important. The black line represents a linear recognition pattern so the 1-year SCRs are all equal with increments of 10. The blue line represents a Binary Fast recognition so the first year SCR is 80 and the remaining years’ SCR are zero. This means that the deterioration is recognized quickly. The red line again shows binary recognition but with a slow pattern as the movement is only occurring toward the end of the liabilities’ life. The two curves in light blue and light red represent less severe versions of the binary forms.

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November 17th, 2016

Reserving and Capital Setting: The Crystalization of Emerging Risks, Part I

Posted at 1:00 AM ET

As discussed in the Executive Summary of this report, the term “crystalization of risk” refers to the timescale over which we realize that the risk is manifesting itself and how this view changes until ultimate understanding of quantum is reached and all liabilities are discharged. The “Reserving Risks” section in last year’s report, Ahead of the Curve: Understanding Emerging Risks looked at how information emerges in the presence of reserving cycles. The profit or loss in any particular financial year is made up of not only the profit or loss from the same accident year but also any recognized changes in the reserves on prior years.

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November 10th, 2016

Newest Versions of Patented Capital Modeling Tools Enhance Automation and Integration, Estimate Inflationary Risk, and Improve Run-Time: Guy Carpenter Introduces MetaRisk® Reserve™ 5 and MetaRisk® 9

Posted at 12:30 AM ET

Guy Carpenter today announced the launch of MetaRisk® ReserveTM 5 and MetaRisk® 9, the latest updates to its powerful suite of capital modeling tools built on more than 25 years of research and development.

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October 31st, 2016

Reserving and Capital Setting: Sizing the Problem, Part III: Quantifying Emerging Risks; Expert Judgement

Posted at 1:00 AM ET

Data quality and availability should also be examined in depth. Because the risks are new, the data may not be captured correctly to power the model, which will lead to further uncertainty and may even preclude the use of a model altogether.

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October 27th, 2016

Analytics: Fueling Risk-Informed Decisions

Posted at 1:00 AM ET

tim_059_headshot Tim Gardner, CEO of U.S. Operations

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Today’s rapidly changing global environment presents insurers with many challenges and opportunities as capital management and risk transfer techniques evolve at an unprecedented pace. Stakeholders, regulators and ratings agencies are deepening their focus on risk management practices, and revolutionary developments in technology, including the Internet of Things and hyper-connectivity, are driving companies to adapt to the challenges that senior management faces to support risk management decisions material to their business.

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October 25th, 2016

Emerging Practices in Risk Tolerances

Posted at 1:00 AM ET

brian-fischer-2014-hs-sm1Brian C. Fischer, Managing Director, GC Analytics®

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Insurers have long embraced the concept of risk tolerances. In some cases, the risk tolerances were expressly stated in a company’s enterprise risk management (ERM) policy document or in other cases exhibited in the course of normal operations.

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October 24th, 2016

Strategic Growth Analysis – The Guy Carpenter Approach

Posted at 1:00 AM ET

chu_julia_photograph-smJulia Chu, Managing Director

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The changes in today’s property and casualty (P&C) insurance marketplace present insurers with many challenges to capital management and risk transfer techniques. Insurers are compelled to leverage their capital positions to increase and diversify their market shares to an unprecedented degree.  Preserving the status quo is not an option for long-term viability.  Profitable growth is a key priority for companies seeking additional return.  Companies need to enter new lines of business or geographies strategically with proper analysis. Guy Carpenter offers proprietary analytical tools, intellectual capital and expertise to help companies determine and evaluate their growth plans while maintaining an acceptable level of risk and profitability.

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October 23rd, 2016

US Property/Casualty Insurers Facing Increasingly Complex Operating Environment: Guy Carpenter Report

Posted at 6:00 AM ET

balancing-risk-and-growth-in-a-changing-market-smGuy Carpenter & Company today released a study which found that, in a challenging operating environment, only 40 of the top 100 US property/casualty (P&C) insurers reported an underwriting profit over the last five accident years.

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