Posts Tagged ‘Capital Markets’



April 3rd, 2014

ERM Benchmark Review, 2013 Update: Part IV

Posted at 1:00 AM ET

Capital Management

Capital management using risk-based capital models and capital allocation is a central component of risk management practices. We have investigated this topic as a new chapter for our 2013 ERM Benchmark update. In this context, Table 3 shows the portion of companies that publish concrete data on their excess capital - the amount of capital retained in excess of a certain target amount. Table 3 also shows both the portion of companies using risk-based capital models in the risk management process and the portion giving some indication of the methodology of the capital allocation process.

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April 2nd, 2014

ERM Benchmark Review, 2013 Update: Part III

Posted at 1:00 AM ET

Risk Types

Table 1 (below) quantifies the proportion of companies in the sample that disclose the method as well as the specific level of various risk quantifications. Compared to our previous ERM benchmark study, a new metric referring to catastrophe risk has been added. Taking advantage of the increased level of disclosure and transparency on catastrophe risk exposure, we have extended our reports to include this in view of its importance in the economic capital approach of (re)insurers.

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April 1st, 2014

ERM Benchmark Review, 2013 Update: Part II

Posted at 1:00 AM ET

2013 Update General Observations

Before focusing on the results of the latest study, we would like to reaffirm the definition of risk profile, risk appetite and risk tolerance found in our previous publications:

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March 31st, 2014

ERM Benchmark Review, 2013 Update: Part I

Posted at 1:00 AM ET

In April and October 2009, Guy Carpenter published two briefings titled “Risk Profile, Appetite and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness.” This briefing is an update of those studies that summarizes the information publicly disclosed on enterprise risk management (ERM) measures.

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March 19th, 2014

Increasing External Demands Compel Companies to Improve Risk Management Disclosures

Posted at 11:30 PM ET

Guy Carpenter released its latest Enterprise Risk Management (ERM) Benchmark Review that provides an in-depth analysis of risk management practices and policies of 67 insurance and reinsurance companies located in Europe, United States, Bermuda, and Asia-Pacific. Based on publicly-available data from financial and risk reports, Guy Carpenter’s ERM Benchmark Review reveals that most (re)insurers are managing capital with metric-based frameworks and are publishing more about their risk management targets than seen in Guy Carpenter’s 2009 analysis. Capital market, legislative, and regulatory influences, such as the approaching implementation of Solvency II, are expected to further compel company managements to better recognize and analyze the risks of their enterprises.

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March 17th, 2014

Chart: Risk Capital Issued by Quarter

Posted at 1:00 AM ET

Property/casualty catastrophe bonds issuance in the period 1997 to 2013.

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March 13th, 2014

Catastrophe Bond Outlook for 2014

Posted at 1:00 AM ET

The growing influence of alternative markets capacity is pressuring traditional reinsurers’ business model and challenging them to compete against a model with lower-cost of capital that continues to enter the reinsurance market. Most reinsurance companies have responded to the challenge by leveraging their incumbent status on reinsurance programs, offering similar or better terms and similar or reduced pricing. Particularly, traditional players are emphasizing their ability to efficiently provide reinstatements, which are seen by many as a critical part of core reinsurance programs, particularly for working reinsurance layers. Traditional players are also hedging their bets and creating their own capital markets divisions to attract, manage and utilize capital from third-party sources whether in the form of fund management, managed accounts or sidecars. This will allow reinsurers the opportunity to securitize the most capital-intensive parts of the business while providing valuable cost-efficient capacity in other business lines.

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March 12th, 2014

GC Securities* Completes Catastrophe Bond Queen Street IX Re Limited for Munich Re

Posted at 5:00 AM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of the Principal At-Risk Notes, with notional principal of $100,000,000, through a newly formed catastrophe bond, Queen Street IX Re Limited, to benefit Munich Re. This is the ninth Queen Street cat bond to benefit Munich Re, the eighth overall cat bond issuance benefitting Munich Re since 2011 and the first cat bond issuance benefitting Munich Re provided via an Irish special purpose reinsurance vehicle.

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March 12th, 2014

Catastrophe Bonds 4th Quarter 2013, Maturities and Risk Capital

Posted at 1:00 AM ET

Catastrophe bond issuance in the fourth quarter of 2013, USD1.82 billion, was minimally offset by the limited amount of catastrophe bond maturities of USD360 million, resulting in a net change of risk capital outstanding of USD1.46 billion.

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March 11th, 2014

Catastrophe Bond 4th Quarter 2013 Issuance Activity

Posted at 1:00 AM ET

Fourth quarter activity began on October 15, 2013 with AXA returning to the catastrophe bond market to issue Calypso II. At the end of October, Catlin issued Galileo Re, their first transaction since 2008. November saw no sponsors come to market. Then there was a flurry of activity in December starting with USAA and AIG both returning to the market for a second time in 2013 with Residential Re 2013-2 and Tradewynd Re 2013-2, respectively. Residential Re 2013-2 Class 1 Notes carried an expected loss of 14.23 percent, making it the second riskiest tranche issued of all time in the 144A catastrophe bond market (the riskiest being Successor I Class B-II issued in 2008 benefiting Swiss Re with an expected loss of 14.73 percent).

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