Guy Carpenter today published a new report highlighting the continued increase in 2014 of total Asia Pacific catastrophe limit purchased. However, a confluence of factors, including the weakening of some key zone currencies has meant that reinsurance premium spend in the region has declined significantly.
Posts Tagged ‘capital’
It has been a little over four years since the enactment and subsequent implementation of the Patient Protection and Affordable Care Act, more widely known as the ACA. The impact on the insurance industry as a whole has been tremendous, but it has not been shared equally among the industry subsectors. While the property/casualty (P&C) industry was not exactly spared, receiving a comparatively “light touch,” the ACA has been a catalyst helping create a transformational bridge between the P&C and the health insurance industries.
Michelle Harnick, Managing Director
Given that the leading cause of financial impairment of insurance companies is inadequate reserves and our view that a reserve “cycle” not only exists but may soon enter a period of adverse development, Guy Carpenter has spent considerable resources researching and building models to better understand and manage reserve risk.
Mutual insurance companies of all sizes currently face challenging market conditions where success requires not only focused distribution and operational excellence, but also access to increasingly sophisticated analytics services and products. How these firms use their resources and advanced technology to respond to these issues will separate market outperformers from underperformers.
A.M. Best’s New Analytics Will Broaden and Improve P&C Industry Capital Modeling and Benchmarking of Tolerances
Jack Snyder, Managing Director, Business Development and Head of the Rating Agency Practice, Strategic Advisory; Eric Simpson, Managing Director in the Rating Agency Practice and Mark Murray, Senior Vice President in the Rating Agency Practice
A.M. Best’s rating analytics continue to evolve and the pace of change is accelerating as the industry embraces more analytical tools, emerging best practices, and peer benchmarking.
Guy Carpenter hosted “The Reinsurance Industry of the Future,” the Reinsurance Symposium held in Baden-Baden, Germany on October 19. A distinguished line-up of industry luminaries expressed their views on whether the current changes impacting the reinsurance sector are permanent and structural in nature, are a tactical response to short-term conditions, or are part of the normal evolutionary process.
Matthew Day, Head of Rating Agency Advisory, Strategic Advisory EMEA - Capital Optimization
What drives (re)insurer capital planning? Maybe it is risk appetite, internal dynamic capital modeling or actuarial analysis. Or perhaps it is external pressure from regulators, rating agencies or investors. In reality, it is probably a combination of all of these factors. Faced with conflicting views of what constitutes both the available capital and the assessment of the amount required relative to the risk, optimizing (re)insurer capital adequacy is likely to be a key challenge confronting a company. Rarely will the company be able to fully satisfy all the demands. Developing a management framework to evaluate, analyze and compare these divergent needs is therefore essential to extract the maximum efficiency from (re)insurer corporate capital structure.
Chart shows the evolution of private catastrophe bonds through mid-year 2014 based on deal count and total aggregate limit placed.
Chart shows the growth in 144A catastrophe bonds through mid-year 2014 with capital outstanding reaching a record high.
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.