Executive teams adapting to the changing dynamics of the specialty insurance and global reinsurance markets in an environment of excess capital, growing influence of convergence participants, low investment returns and diminishing reserve releases are presented with a series of strategic dilemmas and opportunities.
Posts Tagged ‘David Flandro’
The dramatic rise in political instability and civil unrest across the globe, including uprisings in the Middle East and protests in Greece and Spain, has triggered a significant shift in the nature of terrorism risk and has highlighted the need for tailored terrorism and political violence protection, according to “Tensions Building: the Changing Nature of Terrorism Risk and Coverage,” by Guy Carpenter.
David Flandro, Global Head of Business Intelligence, Julian Alovisi, Assistant Vice President, Lucy Dalimonte, Senior Vice President, Ellen Rieder, Managing Director and Emma Karhan, Senior Vice President
Although the need for the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA) is clear, reinsurance protection can help companies withstand the non-renewal or alteration of the program. Indeed, even though the federal backstop currently remains in place, some insurers have decided to further protect their balance sheet with reinsurance protections. These standalone reinsurance protections typically exclude losses resulting from nuclear, biological, radiological or chemical instruments, but would protect all losses from their property, casualty and workers’ compensation business written. Standalone reinsurance pricing continues to vary depending on thegeographical location of the risk(s) as well as proximity of the risk to a perceived target of terrorism.
Guy Carpenter reports that the reinsurance sector enters 2013 equipped with ample dedicated capital and stable pricing. In its 2013 global renewal report, The Route to Profitable Growth, Guy Carpenter finds that the January 1, 2013 renewals took place against a stable backdrop, with only loss-affected lines and select regions experiencing price volatility. The market was supported by a combination of factors including lower than normal catastrophe losses during the first nine months of 2012, new reinsurance capacity and record-high levels of capital.
Guy Carpenter has published a new briefing: Superstorm Sandy: Initial Impacts and Implications
The three key risks outlined in Guy Carpenter’s report: Overcoming Key Risks on the Road to Profitable Growth, Mid-Year Market Overview help explain the persistent low valuations experienced by many companies in the sector. It is apparent that nearly all P&C carriers are affected directly by at least one of these risks. In Guy Carpenter’s role as trusted strategic advisor, there are many opportunities to assist clients in addressing these issues.
Matthew Day, Senior Vice President
For the near-term, Lloyd’s announced its most recent three-year strategic plan (2012-2014) in December 2011, laying out its key priorities for 2012 and beyond. The implementation of Solvency II is one of its top priorities. Lloyd’s plans to continue to lobby the Financial Services Authority (FSA) to ensure Solvency II and other planned European regulations are appropriate for Lloyd’s and to fully understand the impact they will have on Lloyd’s international licenses. Despite the continued uncertainty over implementation dates for Solvency II, Lloyd’s will issue guidance on suggested practice and ensure that managing agents and syndicates meet its requirements.
Matthew Day, Senior Vice President
Lloyd’s - A Short History
Since it was founded in 1688, Lloyd’s has played a key role within the global (re)insurance sector. The initial focus was to offer shipping and cargo insurance coverage to London merchants traveling around the globe from its original base at Edward Lloyd’s Coffee House.
Strategic Growth and International Expansion a Priority for Lloyd’s, According to Guy Carpenter Report
A new report on the Lloyd’s insurance market published today by Guy Carpenter & Company finds that Lloyd’s is looking to improve its global competitiveness despite mounting challenges including low investment returns, record catastrophe losses, subdued economic growth in developed markets and uncertainty over the future of the Eurozone. Lloyd’s: A Vision for Targeted Growth provides an analysis of Lloyd’s operational performance, growth within the sector and explores how changes to the Market’s strategy will impact key players within the insurance industry.
The July 1, 2012, renewal took place against a backdrop of plentiful reinsurance capital. During the first quarter of 2012, the Guy Carpenter Global Reinsurance Composite’s capital position increased by 4 percent to USD184.5 billion (see Figure 1). Dedicated reinsurance capital has continued to strengthen through the second quarter, moderating pricing pressures. One important factor driving these trends has been benign catastrophe activity. Although there have been upward revisions to the catastrophe losses that hit the United States during the first quarter and more US storm and wildfire activity in the second quarter, insured losses during the first six months of the year totaled about USD11 billion. (1) This is significantly below the USD76 billion recorded during the same period of 2011.