Posts Tagged ‘capital’



May 19th, 2016

Risk Analytic Tools, Part II

Posted at 1:00 AM ET

In addition to internal risk management, models are typically used in risk transfer negotiations. Both traditional and alternative risk markets require extensive analysis of portfolios when considering risk transfer. Sharing a portfolio’s standardized model output is critical to imparting the loss potential of a particular portfolio from which risk-capital can be unlocked to support the risk financing needs of a reinsurance buyer. Using technology is critical when partnering governments with the private sector. Whether partnering with developed or emerging economies, these tools bring together the risk knowledge and historical data of the public sector with risk management techniques of the insurance industry. The result is an enhanced understanding of risk that provides stability and attracts partners.

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May 18th, 2016

Risk Analytic Tools, Part I

Posted at 1:00 AM ET

Public sector-related data can be expansive, containing census data, property risk characteristics, historical loss information, risk rating matrices and natural hazard event scientific tracking. In order to facilitate packaging the sometimes unwieldy data in a way that is useful for risk decision making, utilizing outside resources to improve data transparency can be valuable. Public sector resources devoted to building tools that measure risks that are perceived as “uninsurable” can unlock private sector funding.

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May 17th, 2016

Stochastic-based BCAR: Do You Understand Your “Capital-print”?

Posted at 1:00 AM ET

murray_mark-smMark Murray, Senior Vice President

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Technology and innovation continue to change the world around us, creating both opportunities and new challenges for the (re)insurance industry. Advances in risk quantification such as predictive analytics and capital modeling, to name a few, are changing the way we underwrite, price and manage risk. Similarly, technology is allowing A.M. Best (Best’s) to advance the analytics of risk supporting its assessment of balance sheet strength. Taking advantage of stochastic modeling technology, the evaluation of risk within Best’s capital model is undergoing a fairly substantial overhaul to broaden the lens used to analyze risk relative to capital. The technology allows efficient production of multiple capital metrics adjusted for a range of risk levels rather than risk represented by just one data point, providing deeper insights into balance sheet strength, risk profile and risk appetite. The benefit of this overhaul will be a rating that provides greater differentiation among companies, a more informed dialogue around capital versus risk and a more concise measure of “excess” or “deficient” capital. This new lens on capital will significantly influence the way (re)insurers view, measure, communicate and possibly even manage risk.

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May 10th, 2016

The Value of Adopting Own Risk and Solvency Assessment (ORSA)

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas posts examining the benefits to (re)insurers adopting Own Risk and Solvency Assessment (ORSA) standards.

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May 9th, 2016

Unlocking Publicly Held Loss Exposure

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas posts on the competing interests between the private sector (re)insurers and the public sector and how the two recognize the benefits of working together for public sector risk financing.

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May 5th, 2016

Managing and Modeling Emerging Risks

Posted at 1:00 AM ET

Here we review GC Capital Ideas posts on the challenges (re)insurers face managing and modeling casualty catastrophe risks.

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April 7th, 2016

US Residual Markets, Part I

Posted at 1:00 AM ET

The US residual property insurance market segment is comprised of Fair Access to Insurance Requirements (FAIR) Plans, Beach and Windstorm Plans and two state run insurance companies - Florida Citizens Property Insurance Company (Florida Citizens) and Louisiana Citizens Property Insurance Corporation (Louisiana Citizens). These insurance facilities grew out of the civil strife in the 1960s to ensure continued access to insurance in urban areas. Over time they have evolved and their mandate has grown beyond their urban focus. Today these facilities are significant providers of some of the most wind- and earthquake-exposed property insurance in the country.

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March 31st, 2016

Evolution of Risk Capital

Posted at 1:00 AM ET

The continued flow of new capital into the (re)insurance industry constitutes the largest change to the sector’s capital structure in recent memory. New capital has entered the market through investments in insurance-linked securities (ILS) funds, sidecars, hedge fund-backed reinsurance companies and collateralized reinsurance vehicles. Investors have increasingly been attracted to low correlation returns from catastrophe risk relative to traditional capital markets risks and the attractive yield for the measured (re)insurance risk relative to other investments, particularly in the current low inflation, low yield era.

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March 30th, 2016

Risk Analytic Tools, Part II

Posted at 1:00 AM ET

In addition to internal risk management, models are typically used in risk transfer negotiations. Both traditional and alternative risk markets require extensive analysis of portfolios when considering risk transfer. Sharing a portfolio’s standardized model output is critical to imparting the loss potential of a particular portfolio from which risk-capital can be unlocked to support the risk financing needs of a reinsurance buyer. Using technology is critical when partnering governments with the private sector. Whether partnering with developed or emerging economies, these tools bring together the risk knowledge and historical data of the public sector with risk management techniques of the insurance industry. The result is an enhanced understanding of risk that provides stability and attracts partners.

Continue reading…

March 29th, 2016

Risk Analytic Tools, Part I

Posted at 1:00 AM ET

Public sector-related data can be expansive, containing census data, property risk characteristics, historical loss information, risk rating matrices and natural hazard event scientific tracking. In order to facilitate packaging the sometimes unwieldy data in a way that is useful for risk decision making, utilizing outside resources to improve data transparency can be valuable. Public sector resources devoted to building tools that measure risks that are perceived as “uninsurable” can unlock private sector funding.

Continue reading…