Don Mango, Chief Actuary
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According to the draft European Union Solvency IIc directives, companies will need to provide an “own risk and solvency assessment” (ORSA). The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) has prepared an issues paper that provides guidance to assist (re)insurers in implementing the ORSA.
Guy Carpenter’s Global Chief Economist Joan Lamm-Tennant describes how economic capital is a function of the risk profile that comes from simulation based models, but it also requires knowing the company’s risk tolerance. She reviews how hedging frees up the need for economic capital and reduces volatility.
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Guy Carpenter’s Global Chief Economist Joan Lamm-Tennant offers a view of how risk management creates value.
Guy Carpenter’s Global Chief Economist Joan Lamm-Tennant reviews emerging themes, post financial crisis, around enterprise risk and risk capital.
Chris Klein, Guy Carpenter’s Head of Business Intelligence, comments on his view of the proposed new capital requirements for European insurers under Solvency II. Higher amounts of capital required are proposed along with higher quality of capital.
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Chris Klein, Guy Carpenter’s Head of Business Intelligence, reviews the dramatic change and improvement in reinsurers’ fortunes following the global financial crisis. He reviews the year- end 2009 earnings results of the Guy Carpenter Bermuda Reinsurance Composite. He also reviews the primary drivers for capital decline and then growth among those reinsurers in 2008 and 2009, respectively. The impact of capital growth on capacity is also discussed.
Chris McKeown, CEO of Global Analytical and Specialty Practices
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Innovation requires a dedication to research, creativity, resources and foresight. Above all, however, it takes courage to accept the risks — to strive for success rather than cowering in fear of failure. In fact, the best companies learn from occasional mistakes. Learning from failure during the development stages of innovation strengthens a company’s capabilities. It creates an understanding of the issue at hand farther reaching and more in depth than that of the competitors which attach to the idea after it has been accepted as a standard. This understanding fosters a more effective use of that innovation as well as a platform from which to generate new ideas with the practical experience of what works and what does not.
Chris McKeown, CEO of Global Analytical and Specialty Practices
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Those who invest in and prioritize research and development — and introduce new tools and ideas — benefit from more than just the prestige of being first. Early movers define the standard to which others will have to adapt later. They shape the development of innovation, and thus its evolution, as it moves from a radically new idea to an accepted marketplace practice. In possessing this control, they hold the upper hand over their competitors, which become weighted with the burdens of the catch-up clamor.
Chris McKeown, CEO of Global Analytical and Specialty Practices
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Innovation can be a source of competitive advantage. A (re)insurer — or service provider (e.g., a reinsurance intermediary) — devises a solution to a particular challenge that the industry faces. It results in improved risk or capital management, for example, leading to enhanced margins, the optimization of capital deployment or expense management. Since the innovator — or early adopter of a service provider’s new idea — has access first, it realizes the benefit ahead of competitors that wait for the trend to crystallize.
Chris McKeown, CEO of Global Analytical and Specialty Practices Contact
The threats to which (re)insurers’ capital is exposed seem to multiply with alarming regularity. Today, the industry is contending with risks that were barely imaginable (at best) 20 years ago. In an age when carriers must respond to casualty catastrophes, the possible effects of climate change and financial market calamity - perhaps all on the same earnings call - it’s natural to wonder if the right tools and techniques for the job are available. Risk and capital management have only grown in complexity, a trajectory that is quite likely to continue - and probably accelerate.
