Richard Booth, Vice Chairman, Guy Carpenter, considers where opportunities for growth might lie in today’s market. Both emerging and mature risks afford such opportunities. “Take catastrophe risk,” he said. “A common view is that this is a saturated commodity market, yet between 1970 and 2012 70 per cent of total global economic losses from natural catastrophes were not insured amounting to US$1.7 trillion. The gap between economic and insured catastrophe losses continues to widen.” He added: “Elsewhere, new risks such as cyber risk, renewable energy, food and water security, urbanization, growing prosperity and longevity to name but a few present opportunities and gaps that can be filled by insurers and reinsurers.”
Posts Tagged ‘energy’
Tropical depression Isaac was downgraded from tropical storm status as of the 5PM EDT advisory Thursday. Isaac was and still is a large feature. Isaac trailed feeder bands as far as 750 miles (1,200 km) east of New Orleans, causing 5 inches of rain as far away as Charleston, South Carolina. Tropical storm force winds spanned at least 400 miles during the storm. Central pressure during landfall was about 968 mb, consistent with some category-3 hurricanes.
In general terms primary rates on global marine and energy covers were flat. Despite the relatively recent large losses that occurred even energy rate increases tailed off somewhat. There were no specific moves to increase primary rates, which filtered through to marine reinsurance placements, where individual accounts were treated on case by case bases. There did not appear to be any particular areas where reductions were seen. These only occurred if there were specific extenuating circumstances. Marine ILW contracts were one area where pricing and attachment levels increased, primarily driven by the Costa Concordia loss. The original loss reserve recently increased to the USD1 billion level.
July 1 Reinsurance Renewals Reveal Plentiful Capacity amid Benign Catastrophe Activity, According to Guy Carpenter
London Market Excess Loss (LMX) & Global Retrocession
April 2011 and prior renewals with energy (particularly, energy liability) experienced exposure paid rate increases of approximately 20 percent. This represented the first opportunity to re-rate since Deep Water Horizon (DWH). Pricing for non-energy classes remained flat but with little downward pressure. Following the Gryphon loss in April, the energy market hardened further. While there are relatively few excess of loss placements renewing at this time, the perception in the market was that rates are likely to harden further where energy related coverage is sought. There has been very little demand for any additional Gulf of Mexico wind limits prior to the wind season, as original rates remained static and insurers maintained or reduced their aggregate. Retro renewals outside the January 1 renewals are rare, but those that did happen paid increases similar to those at January 1 - between 20 percent and 25 percent. Marine industry loss warranty covers tend to attach mid-year and renewed generally at expiring rates. They experienced rate increases following DWH and generally were in excess of any potential loss from Gryphon ‘A’.
Guy Carpenter & Company announced the expansion of its Global Marine & Energy Specialty with a number of key appointments. Effective immediately, Scott Price has been named Head of U.S. Marine & Energy, reporting directly to James Summers, Head of Global Marine & Energy Specialty. Steve Vivian, also reporting to Mr. Summers, has assumed a new role with responsibility for assisting in the development of the Specialty’s global marine business.
Each year the Global Risks Network - a partnership that includes the World Economic Forum, Marsh & McLennan Companies and others - identifies major global risks, assesses their economic impact, and recommends mitigation solutions. The findings of the Global Risks Network are captured annually in the World Economic Forum’s Global Risks Report.