March 13th, 2013
Solvency II on GC Capital Ideas
Posted at 1:00 AM ET
Here we review recent GC Capital Ideas stories that have touched on issues relating to the Solvency II regime.
Posts Tagged ‘cap mgmt’
February 26th, 2013
Recent Enterprise Risk Management Stories
Posted at 1:00 AM ET
Here we highlight recent GC Capital Ideas stories on enterprise risk management.
Guy Carpenter Launches MetaRisk® 7.1: Guy Carpenter today announced the release of MetaRisk® 7.1, the latest version of the firm’s premier risk and capital management decision making tool. The platform offers access to a variety of new features and enhancements that will improve usability, increase overall functionality and enable the development of more accurate and efficient risk and capital models.
Risk Preference Function - Embedding Risk-Reward in Capital Allocation: Capital allocation decisions are among the most important decisions made by company management. Through our own research and thought leadership and our observance of best practices at clients around the world, Guy Carpenter’s Enterprise Risk Management Advisory practice has compiled a set of leading practices around capital allocation for (re)insurers.
February 20th, 2013
Guy Carpenter Launches MetaRisk® 7.1
Posted at 6:00 AM ET
Guy Carpenter today announced the release of MetaRisk® 7.1, the latest version of the firm’s premier risk and capital management decision making tool. The platform offers access to a variety of new features and enhancements that will improve usability, increase overall functionality and enable the development of more accurate and efficient risk and capital models.
February 20th, 2013
Adapting to an Evolving Market of More Permanent Capital Market Capacity
Posted at 1:00 AM ET
Christopher Ezbiansky, Mergers and Acquisitions Advisory - Americas and Des Potter, Mergers and Acquisitions Advisory - Europe, GC Securities*
A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment. Faced with current economic conditions, reinsurers are finding it more difficult to generate adequate returns in excess of their cost of capital, and are seeing an increased competitive threat from alternative capacity from the capital markets. New money appears to be more permanent and therefore limits the firmness and duration of any improved rate environment. Catastrophe bonds, sidecars, structured industry-loss warranties and collateralized reinsurance vehicles are among the alternative market options. Hedge funds are also playing a more active role, with a couple of major names setting up reinsurance operations in Bermuda.
February 5th, 2013
Capital Management Developments
Posted at 1:00 AM ET
Here we review recent GC Capital Ideas’ top stories on capital management.
Risk Preference Function - Embedding Risk-Reward in Capital Allocation: Capital allocation decisions are among the most important decisions made by company management. Through our own research and thought leadership and our observance of best practices at clients around the world, Guy Carpenter’s Enterprise Risk Management Advisory practice has compiled a set of leading practices around capital allocation for (re)insurers.
Adapting to an Evolving Market of More Permanent Capital Market Capacity: A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment. Faced with current economic conditions, reinsurers are finding it more difficult to generate adequate returns in excess of their cost of capital, and are seeing an increased competitive threat from alternative capacity from the capital markets. New money appears to be more permanent and therefore limits the firmness and duration of any improved rate environment.
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*Securities or investments, as applicable are offered in the US through GC Securities, a division of MMC Securities Corp. (”MMCSC”), a US registered broker-dealer and member FINRA/SIPC. Main office: 1166 Avenue of the Americas, New York, NY 10036. Phone: 212.345.5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority.
October 22nd, 2012
Risk Preference Function – Embedding Risk-Reward in Capital Allocation
Posted at 1:00 AM ET
Donald Mango, Head of Global Advisory
Contact
Capital allocation decisions are among the most important decisions made by company management. Through our own research and thought leadership and our observance of best practices at clients around the world, Guy Carpenter’s Enterprise Risk Management Advisory practice has compiled a set of leading practices around capital allocation for (re)insurers.
September 9th, 2012
Adapting to an Evolving Market of More Permanent Capital Market Capacity
Posted at 11:00 PM ET
Christopher Ezbiansky, Mergers and Acquisitions Advisory - Americas and Des Potter, Mergers and Acquisitions Advisory - Europe, GC Securities*
A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment. Faced with current economic conditions, reinsurers are finding it more difficult to generate adequate returns in excess of their cost of capital, and are seeing an increased competitive threat from alternative capacity from the capital markets. New money appears to be more permanent and therefore limits the firmness and duration of any improved rate environment. Catastrophe bonds, sidecars, structured industry-loss warranties and collateralized reinsurance vehicles are among the alternative market options. Hedge funds are also playing a more active role, with a couple of major names setting up reinsurance operations in Bermuda.
June 26th, 2012
Top Solvency II Stories in GC Capital Ideas
Posted at 1:00 AM ET
Here we highlight GC Capital Ideas’ recent top stories covering the evolving Solvency II capital requirements regime.
June 21st, 2012
Alternative Risk Transfer
Posted at 1:00 AM ET
Here we review GC Capital Ideas’ recent series on alternative risk transfer.
Alternative Risk Transfer: Part I, Adverse Development Cover, Aggregate Stop Loss: Alternative risk solutions are used to address the following client motivations: rating agency issues, adverse development, earnings stability, reserve and premium leverage issues, reinsurance recoverables, terrorism risk, capital optimization constraints, mergers and acquisitions, discontinued lines of business, provide coverage for gaps in traditional placements and optimizing costs. The structured risk team designs customized solutions to achieve a particular client’s goals. An optimal reinsurance structure is determined by capacity needs, risk tolerances, capital management, cost of risk and degree of confidence in results. A cedent will need to balance the cost of transferring sources of risk with not only its own capital management strategies but also capital requirements imposed by rating agencies.
Alternative Risk Transfer: Part II, BCAR Impact, Quota Share and Working Layer Excess of Loss Covers: Purchasing an aggregate stop loss provides a positive impact to the BCAR score by decreasing the capital charge. In year one, the benefit of the purchase is applied to the premium risk charge for the current accident year with benefit to the reserve risk charge in future years. In the first year, the accident year stop loss may reduce the premium risk charge significantly. The biggest reduction in the premium risk charge will occur when the stop loss provides protection between A.M. Best’s estimate of the expected loss ratio and 35 percent to 45 percent above that estimate. The decrease in the capital factor is equal to the limit purchased net of the AP that must be paid in the event of a loss. Surplus is reduced by the after-tax margin paid. For the second year, the reduction in capital charge is applied against the loss reserves. This reduces the benefit in the second year from that achieved in the first year, as the reserves are net of loss payments made in year one.
April 3rd, 2012
Finding Success in a Transitioning Market - How Guy Carpenter Can Help: Part II
Posted at 1:00 AM ET
Portfolio Management
Guy Carpenter offers multiple tools for clients that are looking to implement portfolio management and enterprise risk management (ERM) strategies. Our tools focus on both natural and man-made catastrophes, and we work with clients to tailor the right short-term and long-term solutions.
