Posts Tagged ‘Catastrophe’
GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member of FINRA/SIPC, today released an analysis of activity and trends within the catastrophe risk market from the fourth quarter of 2013, also including the outlook for 2014. According to the report, influence from direct capital markets’ participation in reinsurance programs, coupled with catastrophic insured losses well below historical averages in 2013, put significant pressure on global catastrophic reinsurance pricing. As a result of significantly reduced pricing, relative to recent years, approximately $7.1 billion worth of new property and casualty (P&C) catastrophe bonds were issued in 2013 - the second highest record year for P&C issuance.
The impact the capital markets have had on the property catastrophe reinsurance space is undeniable. Analyzing 2013 market activity, it is also undeniable that much of the movement the market witnessed is as much driven by traditional reinsurers’ changing behaviors. While companies buying catastrophe coverage benefitted, across product type and geography, from collateralized capacity in the market, deployment of this capacity has been targeted.
As with Europe, 2013 was a year of flood in the Americas, with notable events in Alberta, Toronto and Colorado. The flood event in the Calgary, Alberta area of Canada resulted in estimated insured losses of around USD2 billion, with economic losses of USD4.8 billion (1). This event, combined with flash-flooding in Toronto, Ontario in July, meant Canada experienced its most expensive insured catastrophe loss year on record.
2013 provided a respite for the (re)insurance industry following above-average losses in 2011 and 2012, with insured losses from natural catastrophes and man-made disasters estimated at around USD40 billion, according to Guy Carpenter & Company (see Figure 1). This is considerably less than the ten-year average loss of approximately USD60 billion and well below the most significant years of 2005 and 2011 (see Figure 2 (Inflation adjusted)). This can be partly attributed to the unusually quiet 2013 Atlantic tropical season. About 47 percent of insured losses in 2013 were reported in the Americas, 31 percent in Europe and 20 percent in Asia and Australasia (see Figure 3). Continue reading…
Guy Carpenter & Company released its 2013 Catastrophe Review, which shows that natural catastrophes and man-made disasters in 2013 resulted in insured losses of approximately $40 billion. Following above-average losses experienced in 2011 and 2012, 2013 provided a respite for the (re)insurance industry as insured losses were considerably less than the ten-year average of approximately $60 billion.