Posts Tagged ‘capital’



January 15th, 2019

Cost of Capital and its Use in Valuing Reinsurance

Posted at 1:00 AM ET

Increasingly, reinsurance is seen as an important element of capital management. Reinsurance decisions are moving away from the reinsurance buyer and towards the finance teams. These teams need to find a way of comparing reinsurance in a straightforward way. Defining the cost of capital for reinsurance means that it can be compared with other capital sources.

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January 14th, 2019

Reinsurance Rate Movement Limited at January 1 Despite Uncertainty over Pricing Adequacy and Available Capital

Posted at 4:01 AM ET

The overall impact of catastrophe losses on property rates was muted at the January 1, 2019 reinsurance renewals, but the fourth highest annual catastrophe loss year on record did create questions over pricing adequacy, underwriting strategy and the amount of capital available, says Guy Carpenter. Continue reading…

January 10th, 2019

Balance Sheet Expansion: Opportunities and Challenges

Posted at 1:16 AM ET

balance_sheet_expansionFrom 2014 to 2017, the property and casualty (P&C) industry in the United States grew its collective capital position from USD 686 billion to USD 767 billion, a 3.8 percent compound annual growth rate*. This expansion in capital was achieved during a period when the normalized return profile of the P&C underwriting business was considered to be below the cost of capital. The growth of industry capital during this period of subpar underwriting returns provides insights into the expectations for carriers’ opportunities and challenges through 2018 and into the years ahead. Continue reading…

December 10th, 2018

Cost of Capital and its Use in Valuing Reinsurance

Posted at 1:00 AM ET

Increasingly, reinsurance is seen as an important element of capital management. Reinsurance decisions are moving away from the reinsurance buyer and towards the finance teams. These teams need to find a way of comparing reinsurance in a straightforward way. Defining the cost of capital for reinsurance means that it can be compared with other capital sources.

Continue reading…

November 13th, 2018

A Math Formula May Offer a Solution to Insurers’ Critical Challenges

Posted at 1:00 AM ET

Guy Carpenter has developed a methodology that applies a mathematical formula to provide insurers and reinsurers with a unified, practical framework for risk pricing and capital allocation.

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October 30th, 2018

The Transformation of Australian and New Zealand life insurance - GC@SIRC Commentary

Posted at 8:00 PM ET

matthew_rose_01Matthew Rose, Managing Director

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  • Foreign companies are seeking the long-term growth opportunities that the Australian market offers
  • Insurers are gaining understanding of the significance of efficient and dynamic restructuring of their capital
  • Regular discussions ensure that covers are properly structured to reflect current risk/capital needs

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October 29th, 2018

Closing the Gap: Insurance Penetration and Public Sector Risk Financing in Asia Pacific - GC@SIRC Commentary

Posted at 10:00 PM ET

michael-schwarz_resizedMichael Schwarz, Head of Public Sector, Asia Pacific

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  • Our industry should be a critical contributor to increasing community resilience against volatility and shocks to their environments
  • Public-private risk-transfer partnerships offer a huge opportunity for the insurance industry to grow. However, one size does not fit all. In addition to technical expertise, specific knowledge and understanding of client needs are essential
  • Recent functional risk transfer mechanisms are using data, analytics and modeling to spur change in the landscape around flood, droughts and other perils

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October 29th, 2018

Life: Emerging Competition and the Need to Remake the Reinsurance Relationship - GC@PCI Commentary

Posted at 9:00 AM ET

rains_david-5-2015-reduced-sizeDavid Rains, Managing Director

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  • Life reinsurance value prop a combination of risk capital, differentiated underwriting knowledge and value-added services
  • Availability of capital and insurers’ success in closing knowledge gap in underwriting reduce need to purchase risk protection
  • Reinsurers can position their InsurTech and advanced technologies to make advisory services a core deliverable

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October 29th, 2018

As Insurance Market Cycle Evolves, Carriers Must Review Underwriting Strategies

Posted at 8:00 AM ET

Guy Carpenter has completed its annual review of property & casualty (P&C) results and found that insurers’ operating environment today is very different than just a few short years ago.

Formerly stable lines produced significant volatility in 2017, while others that often struggle to produce underwriting returns enjoyed multi-decade highs in profitability. And the familiar underwriting cycle has decoupled materially across long-tail casualty lines, with profitability, growth and reserve development moving in widely different directions by line and segment. These are just a few of the findings reported in the company’s 2018 Risk Benchmarks Research Report, which focuses on the risk and performance of US P&C insurers. Continue reading…