Posts Tagged ‘Catastrophes’



January 14th, 2015

GC Capital Ideas Top CAT-I Stories: For the Year 2014

Posted at 1:00 AM ET

Here is a look back at the 10 most popular CAT-i stories for 2014.

1. Severe Weather Outbreak in U.S.: April 26 to 30, 2014: A multi-day severe weather outbreak rendered severe impacts from April 26 to 30 affecting a large area of the United States. The outbreak occurred along a powerful spring frontal system that evolved from the Southern Rockies and pressed towards the Southern Great Lakes and affected the Atlantic Coast. According to the U.S. Storm Prediction Center (SPC), there were widespread reports of straight-line (nontornadic) wind and hail over the Southern States, Midwest and Lower Great Lakes. Tornado reports were widespread, with strong to violent tornadoes reported in states including Alabama, Arkansas, Kansas, Tennessee, Iowa and Mississippi. Severe flooding was also reported in Alabama and Florida.

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2. Balkans Floods: Heavy rain caused widespread flooding across several countries in the Balkans region of Southeast Europe. Serbia, Bosnia and Herzegovina and Croatia were badly affected by the floods in May. According to Serbia’s Meteorological Institute, three months’ worth of rain fell in just three days in mid-May, resulting in the worst floods to hit the country since rainfall measurements began some 120 years ago. Bosnia also experienced its heaviest rainfall since records began in 1894, reports said.

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3. 6.0Mw Earthquake - American Canyon, California: A 6.0-magnitude earthquake was reported by the U.S. Geological Survey (USGS) about 4 miles northwest of American Canyon, California and five miles north-northwest of Napa, California. The quake occurred at 3:20 a.m. local time (10:20 UTC) near the north shore of San Pablo Bay, with a magnitude of 6.0. The quake depth was 7.0 miles (11.3 km).

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4. 8.2Mw Earthquake Near Chile Coast: An 8.2-magnitude earthquake was reported by the U.S. Geological Survey (USGS) about 40 miles off the northern coast of Chile on the evening of April 1. More than 60 aftershocks were reported following the initial event, one of which was measured of magnitude 6.2. Shaking was felt as far away as La Paz Bolivia, over 290 miles (470 km) away.

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5. Severe Weather Outbreak In U.S.: June 3, 2014: A severe weather outbreak led to excessive wind gusts, significant hail, and a handful of tornadoes on June 3, according to reports. The area most severely affected covered the eastern two thirds of Nebraska together with portions of Iowa, Missouri, Kansas and Illinois.

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6. Hurricane Gonzalo: Hurricane Gonzalo was forecast to make a direct hit or close approach to Bermuda sometime on Friday, October 17, most likely as a Category 3 hurricane on the Saffir-Simpson scale. Hurricane and tropical storm force winds extended outward up to 45 miles (75 kilometers) and 150 miles (240 kilometers) from the center of circulation, respectively.

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7.  Hurricane Arthur: Hurricane Arthur was the first hurricane to make U.S. landfall since 2012, and the earliest to make North Carolina landfall for any hurricane season since 1908. According to the National Hurricane Center (NHC), Arthur made landfall in North Carolina on July 3 at about 11:15 p.m. EDT (0315 UTC), with maximum sustained winds of 100 mph (161 km/hr).

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8. Hurricane Odile: Hurricane Odile made a direct hit to the Southern end of the Baja Peninsula, Mexico, in mid-September, with impacts of great severity. Maximum sustained winds at landfall were 125 mph, a Category 3 hurricane on the Saffir-Simpson scale, according to the National Hurricane Center (NHC).

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9. Hawaii Double Threat: Hurricanes Iselle and Julio: Hurricane Iselle was poised to become the first hurricane in 22 years to make a direct landfall in Hawaii. According to the Central Pacific Hurricane Center (CPHC), Iselle was located 305 miles east-southeast of Hilo, Hawaii and 510 miles east-southeast of Honolulu, Hawaii.

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10. Severe Weather Outbreak in U.S.: June 16, 2014: An especially volatile environment produced a violent severe weather outbreak affecting areas of Nebraska, Iowa and Wisconsin. Severe to complete property damage was reported in Pilger, Nebraska and surrounding areas. Initial evidence indicated two tornadoes in close proximity near Pilger, with EF-2 to EF-3 intensities. Tornadoes were also reported in Southern Wisconsin where severe damage occurred. Hail and straight-line (nontornadic) wind reports also covered a very widespread area, with reports of hail exceeding two inches in diameter and wind gusts exceeding 74 mph.

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January 8th, 2015

Chart: Significant Insured Losses – 2011 to YE 2014

Posted at 3:24 PM ET

Reports losses by quarter. 

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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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December 4th, 2014

Casualty Catastrophe Risk Modeling: Part II

Posted at 1:00 AM ET

Casualty catastrophe occurrences have become increasingly common over the past decade. The recent 2008 financial catastrophe is the easiest to cite, due to its sheer size and the fact that it continues to unfold even today. But, there have been many others. The collapse of the “dotcom economy” led to scandals around initial public offering laddering and equity analyst conflicts of interest. Accounting firms were not alone in suffering financial loss related to such debacles as Enron, WorldCom, Tyco and Adelphia. While insured losses did not reach those of property catastrophes, economic damages were profound. Enron’s loss of USD66 billion in market capitalization alone - not including the economic damage caused to other companies - was more than double that of Hurricane Ike (approximately USD30 billion). The financial catastrophe is estimated to have caused economic damage of above USD1 trillion, with more likely to follow. When considered in the context of the Deepwater Horizon industrial accident, the casualty catastrophe that unraveled from the largest US offshore energy event over the past 40 years was by no means remote. Beyond the initial property loss of the actual drilling rig, liability risk in paying claims continues to extend and ripple throughout the supply chain involved as well as the environmental impact to numerous coastal and commercial businesses. Asbestos litigation, perhaps the longest casualty catastrophe on record, has paid out over USD70 billion and by some accounts may be entering its third wave. Therefore, asbestos is an emerging crystalizing risk that needs to be continuously monitored, measured and modeled for those who continue to be exposed to it.

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December 3rd, 2014

Casualty Catastrophe Risk Modeling: Part I

Posted at 1:00 AM ET

Casualty (or liability based) catastrophes have become increasingly frequent and severe over the past decade, exposing (re)insurers to much more risk than they may have realized and reserved for. One root cause can trigger a chain reaction that can bleed balance sheets and even imperil solvency. Until recently, casualty carriers had little choice but to accept this risk as losses emerged.

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October 29th, 2014

Guy Carpenter Publishes Flood Risks in Asia — A Detailed Study

Posted at 4:30 PM ET

Guy Carpenter today released a new report titled Flood Risk in Asia - A Detailed Study. The report provides an in-depth study of the flood potential in Asia along with the prevention and protection systems in place.

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September 9th, 2014

Guy Carpenter Series Details Impact Of 2004 & 2005 Hurricane Seasons

Posted at 5:00 AM ET

Guy Carpenter today released Part One of a two-part series report detailing a ten-year retrospective on the 2004 and 2005 Atlantic Hurricane Seasons - two landmark years that were not only significant for their weather events, but for their lasting effects on the (re)insurance industry. The report examines the meteorological conditions that contributed to the weather activity characterizing both hurricane seasons, as well as the impact on underwriting and claims adjusting practices, cat modeling, and the Florida Hurricane Catastrophe Fund (FHCF).

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September 3rd, 2014

Guy Carpenter Launches Probabilistic European Hail Model

Posted at 11:30 PM ET

Guy Carpenter launched its new leading-edge probabilistic hail model for Europe. The G-CAT® Hail Model features a unique approach to producing historic hail tracks using a lightning detection system developed for Guy Carpenter by atmospheric research firm nowcast GmbH. 

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June 4th, 2014

What is Food Security?

Posted at 1:00 AM ET

Here we review how the application of risk management practices and risk transfer can assist individual countries and small geographic locations with providing food security for the populace.

What is Food Security? Part I: Fundamentally food has to be safe, nutritious and available in sufficient quantity. On a global scale these are always achievable. It is at a country or smaller geographic territory-level where problems often arise.

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What is Food Security? Part II: A challenge in many regions is the transport from the farm of the right food to the consumer without physical loss or spoilage. Putting transit losses aside, there is a question of getting the “correct” food and influencing the supply chain.

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What is Food Security? Part III: Putting It into Practice and a Look to the Future: In several Asian countries there are already examples of attempts to alleviate the physical, social and economic factors that hamper food security. China in particular is rapidly developing a sophisticated agriculture insurance system with evidence of a number of different risk transfer instruments.

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May 29th, 2014

Europe Embraces Annuity Settlements for Bodily Injury

Posted at 1:00 AM ET

Here we review GC Capital Ideas entries highlighting Europe’s embrace of periodic payment orders over traditional lump sum payments for the settlement of bodily injury claims.

Time Off for Certain Behavior: The Courts Act of 2003 fundamentally changed the way that catastrophic injury claims are settled by insurers. It gave the courts the power to enforce a periodic payment order (PPO) as compensation instead of an upfront lump sum payment. A PPO is an annuity payment from the insurer to the claimant, and is designed to cover ongoing care costs, loss of earnings and other expenses associated with the injuries sustained for the rest of the claimant’s lifetime.

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Chart: Prevalence of Annuity Settlements in Europe: For bodily injury claim settlements in Europe, the trend is shifting away from lump sums and towards annuity-type settlements, which come with risks related to longevity, inflation and hedging.

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