The major rating agencies covering the reinsurance sector (A.M. Best, S&P, Moody’s, Fitch) have all voiced concerns with the industry’s ability to adjust to the seemingly overwhelming headwinds currently facing the sector. With A.M. Best recently changing its outlook, the view of the reinsurance sector across the rating agencies is now unanimously negative.
Posts Tagged ‘cap mgmt’
GC Videocast - Rendez-Vous Press Briefing 2014 (James Nash) Asia Pacific Sees Increased Understanding and Quantification of Catastrophe Risk
James Nash, CEO of Asia-Pacific Operations, Guy Carpenter, considered the potential that existed in Asia-Pacific. “It is a blend of mature and emerging markets,” he said, “full of opportunities and challenges, and it requires all market participants to have a broad and diverse set of skills and offerings.” He continued: “As regulation develops across the region, and insurers are open to a wider array of modelling options by vendor and peril, we are seeing an increase in the understanding and quantification of the catastrophe risk in the region. This in turn leads to more transparent risk and capital management decision-making,” but, “at this stage the majority of alternative capital activity remains in the mature markets of Japan and Australia.”
Guy Carpenter today announced the appointments of Eric Simpson as Managing Director and Mark Murray as Senior Vice President. Mr. Murray reports to Mr. Simpson, who reports directly to Jack Snyder, Managing Director, Head of the Rating Agency Practice, Guy Carpenter Strategic Advisory. Both are based in the Philadelphia office. Mr. Simpson joined Guy Carpenter on April 28 and Mr. Murray on April 21.
Guy Carpenter hosted “Transferring Risk - Is the Insurance and Reinsurance Industry Adequately Serving its Clients?” the Reinsurance Symposium held in Baden-Baden on October 20, 2013. The event explored a range of topics including: the gap between economic and insured losses; how new capital entering the market can move beyond property catastrophe; and measures to provide coverage for new and emerging risks.
For bodily injury claim settlements in Europe, the trend is shifting away from lump sums and towards annuity-type settlements, which come with risks related to longevity, inflation and hedging. Insurance companies with significant casualty business may see their risk profiles transform over time to be more like pensions funds - but without working members and with even longer lasting liabilities. While the insurance industry is beginning to understand the implications of this move to annuity settlements, it does not have a clear understanding of the implications for an increasingly important regulatory balance sheet metric: Risk Margin.
Donald Mango, Head of Global Advisory
With Solvency II and similar regimes in place and still on the horizon in some countries, and the continuing evolution of rating agency requirements, the last decade has seen the (re)insurance industry fully embrace the practice of enterprise risk management (ERM). As a trusted advisor to (re)insurers globally, Guy Carpenter has observed firsthand what it takes to implement ERM successfully. An ERM program’s effectiveness may be enhanced with the benefit of adherence to a set of simple tenets.
Des Potter, Head of GC Securities (EMEA)
Faced with an abundance of excess capital, negligible growth in global reinsurance spend and the pricing outlook continuing to soften, one of the biggest challenges for reinsurers is deciding how to deploy excess capital to generate a return that meets or exceeds the expectations of shareholders.
Guy Carpenter released its mid-year market report, highlighting a time of dynamic capital growth in the reinsurance industry. As investors supply capacity through a convergence of alternative and traditional vehicles, the report details the ways in which this new supply of capital and excess capacity has changed the nature of the sector’s capital structure.