Posts Tagged ‘capital’



January 28th, 2015

GC Videocast - Linking Risk Appetite to Strategy

Posted at 1:00 AM ET

In the second video in the Holistic Balance Sheet Management series, Andrew Cox, Capital Optimization, Guy Carpenter and Niall Clifford, Financial Strategy Group, Mercer, explore how companies should approach investment risk and the link between investment strategy, risk appetite and reinsurance strategy. A key focus for insurance companies should be to link their investment strategy with their risk appetite metrics. While any increase in return on capital may seem very attractive, it is important that companies ensure that the risks they are taking are in line with their risk appetite and that they are aware of their constraints, allowing them to take risks in a measured way. Investment strategy should be considered alongside regulatory requirements, as a key aspect of Solvency II relates to how well each company understands the risks in its portfolio.

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January 27th, 2015

GC Videocast - Introduction to Holistic Balance Sheet Management

Posted at 1:00 AM ET

A holistic approach that optimizes the use of the two traditionally separate areas of balance sheet management within the current market environment has proven to be extremely challenging for non-life insurers. The key issue for non-life insurers is how to boost return on capital in a continuing low-yield environment. In the first of the Holistic Balance Sheet Management series, Andrew Cox, Capital Optimization, Guy Carpenter, and Niall Clifford, Financial Strategy Group, Mercer, discuss how insurance companies may optimize their capital while addressing their concerns over economic capital, earnings risk, ratings agency requirements and increasing constraints due to Solvency II.

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January 26th, 2015

Holistic Balance Sheet Management: Ensuring Added Value; Introduction to Videocast Series

Posted at 1:00 AM ET

A holistic approach that optimizes the use of the two traditionally separate areas of balance sheet management (reinsurance and investment strategy) can make a significant difference to (re)insurers’ financial results. (Re)insurers should seek to address both the asset and liability sides of the balance sheet in an integrated manner.

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January 13th, 2015

GC Capital Ideas Top Chart Room Entries: For the Year 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the year of 2014:

 

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

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2. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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3. Chart: Regional Property Catastrophe ROL Index: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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4. Chart: Evolution of Dedicated Reinsurance Capital, 2012 - YE 2013: The evolution of dedicated sector capital is presented in the chart. Guy Carpenter estimates this rose marginally in 2013 to USD322 billion at year-end as underwriting profits from low catastrophe claims and convergence capital inflows offset unrealized losses, sustained share buybacks and dividend payments.

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5. Chart: Catastrophe Bond Issuance and Capital Outstanding: Issuance reached a record high of USD7.1 billion, surpassing 2007’s total. Risk capital outstanding also reached an all-time high of USD18.6 billion last year.

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6. Chart: 2013 Catastrophe Bond Transactions: This table lists the 144A property/casualty catastrophe bond transactions that were completed in 2013.

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7. Chart: Top Ten Catastrophe Bond Transactions: The chart ranks deals in 2013, as compiled by GC Securities*, a division of MMC Securities Corporation. 

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8. Chart: Pension Fund Capital Under Management and Allocations into Reinsurance: As the chart illustrates , pension funds alone are worth around USD30 trillion. Based on Guy Carpenter’s analysis of possible capital allocation percentages to the (re)insurance space in consultation with sector experts, a maximum of USD900 billion of this amount could potentially be available for insurance-linked investments. This figure is, of course, much greater than currently needed, demonstrating the existing convergence-driven supply excess. Given Guy Carpenter estimates global property catastrophe limit is currently in excess of USD300 billion, and the ILS market only accounts for around 15 percent of this amount, pension funds have so far made very small investments in reinsurance relative to their overall size.

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9. Chart: U.S. Property Catastrophe Reinsurance Quoting Behavior: In this chart, the January 1, 2014 average quote across all programs is represented by the line at 0 percent, while the red dots indicate reinsurers’ distances from the mean across all the programs that they quoted. The size of the line represents the variability from the average for all quotes provided by the reinsurer. Each reinsurer is represented across the bottom of the chart by its A.M. Best rating. Quotes representing non-concurrent terms were excluded.

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10. Chart: European Property Catastrophe - Typical ROL Changes: The chart compares changes at January 2014 with January 2013.

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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/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. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 12th, 2015

GC Capital Ideas Top Chart Room Entries: Fourth Quarter, 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the fourth quarter of 2014:

 

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

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2. Chart: Catastrophe Bonds Versus Various Other Capital Market Assets Classes: Chart shows the cumulative return profile of 144A catastrophe bonds (as a proxy for all capital markets-based risk transfer capacity) versus various other capital market asset classes through mid-year 2014.

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3. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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4. Chart: Private Catastrophe Bonds Mid-Year 2014: Chart shows the evolution of private catastrophe bonds through mid-year 2014 based on deal count and total aggregate limit placed.

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5. Chart: Catastrophe Bond Capital Growth Mid-Year 2014: Chart shows the growth in 144A catastrophe bonds through mid-year 2014 with capital outstanding reaching a record high.

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6. Chart: Regional Property Catastrophe ROL Index: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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7. Chart: Combined Ratio for Guy Carpenter Composite, H1 2014: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through first half, 2014.

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8. Chart: Return On Equity For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2004 through first half, 2014.

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9. Chart: Evolution of Shareholders’ Funds For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents the evolution of shareholders’ funds for the Guy Carpenter Global Reinsurance Composite, 2012 through first half, 2014.

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10. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for the first half, 2014 compared to first half, 2013.

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Click here to view additional materials in GC Capital Ideas’ Chart Room >>

Click here to register to receive e-mail updates>>

 

Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/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. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 8th, 2015

Chart: Catastrophe Bond Issuance and Capital Outstanding - 1997 to YE 2014

Posted at 3:28 PM ET

The chart below presents catastrophe bond issuance through 2014, a record setting year. 

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January 8th, 2015

Chart: Alternative Capacity as a Percentage of Catastrophe Reinsurance Limit

Posted at 3:20 PM ET

The chart below presents alternative capital capacity as a percentage of global property catastrophe reinsurance limit from 2008 to year-end 2014.

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January 8th, 2015

Chart: Evolution of Dedicated Reinsurance Capital, 2013 to YE 2014

Posted at 3:14 PM ET

The evolution of dedicated sector capital is presented below. Guy Carpenter estimates dedicated sector capital remained at near record levels having risen to approximately USD400 billion at year-end 2014 from traditional rated markets and all sources of alternative capital including sidecars, collateralized reinsurance vehicles and catastrophe bonds.

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January 6th, 2015

January 1, 2015 Renewals See Lower Pricing and Broader Coverage for Clients

Posted at 11:30 PM ET

Guy Carpenter reports reinsurance pricing fell at the January 1, 2015 renewals in many segments, affecting almost all lines of business and geographies, continuing recent renewal trends.

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January 5th, 2015

GC Securities* Completes First Ever Swiss Franc-Denominated Private Catastrophe Bond (“Gurten”) Benefitting Gebäudeversicherung Bern

Posted at 10:30 PM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the Regulation S placement of Principal At-Risk Variable Rate Notes (”Notes”) due January 15, 2016, with notional principal at CHF70,000,000 through Kaith Re Ltd., to benefit Gebäudeversicherung Bern (”GVB”). This is the first ever Swiss franc-denominated catastrophe bond and the first time that GVB has utilized the cat bond market to manage its risks.

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