Posts Tagged ‘E&O’



February 13th, 2012

January 2012 Reinsurance Renewal: U.S. Professional Liability

Posted at 1:00 AM ET

Directors & Officers

D&O reinsurance rates were flat slightly at the January 1, 2012, renewal, despite small rate increases on some primary and lower excess insurance layers in recent months. Pricing was more competitive on higher excess insurance layers and is down approximately 10 percent year over year. For 2012 modest price increases in primary and first excess insurance layers are likely, especially in light of rate changes over the past few months. Rate decreases on excess insurance layers will be smaller, resulting in a net flattening. Small and medium-sized businesses are likely to follow the same trajectory.

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February 3rd, 2011

Chart: Professional Liability Lines - Typical Excess of Loss Rate Changes at Jan. 1

Posted at 1:00 AM ET

fig-28

Click here to read the Executive Summary of Guy Carpenter’s report: Global Reinsurance Outlook: Points of Inflection; Positioning for Change in a Challenging Market >>

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January 27th, 2011

2011 Reinsurance Renewal Rates: Errors & Omissions

Posted at 1:00 AM ET

141x141jan1thumb39Per risk working layer program rate on line varied by subclass of business for per risk errors and omissions (E&O) reinsurance. Lawyers professional liability fell 10 percent year over year for the larger law firm segment, while flat to down 15 percent for smaller cedents. Real estate E&O rates were flat to up 2.5 percent year over year, and accountants professional liability was flat to down 10 percent. Large miscellaneous cedents had rate changes that were flat to down 10 percent, with smaller companies flat to down 7.5 percent.

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March 1st, 2010

Errors & Omissions Insurance at the January Renewals

Posted at 10:00 AM ET

Anticipating that the recent economic downturn, as it had in prior occurrences, would result in increased claims activity, primary insurers sought rate increases. The highly competitive market environment prevented them from realizing the increases. Primary E&O rate reductions continued downward in 2009, averaging declines between 5 percent and 10 percent for insureds exhibiting no material change in exposure and loss activity. Certain sub-segments, such as small to mid-sized law firm business, are indicative of the highly competitive landscape of the E&O segment.

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October 20th, 2009

Casualty Clash and Casualty Catastrophe Risks, Part II: Age of Casualty Catastrophe Risks

Posted at 1:00 AM ET

metropoulos_emil_bioEmil Metropoulos, Senior Vice President
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The global financial crisis that has unleashed havoc on credit and equity markets is the most recent casualty catastrophe (with both systemic and classic clash characteristics), and it may be the largest in recent memory … but it certainly isn’t the first. In fact, there have been many, and their frequency has increased over the past two decades, allowing financial markets little reprieve from one disaster to the next.

The stock market crash of Oct. 19, 1987, kicked off the modern casualty catastrophe age. The Dow Jones Industrial Average lost 22 percent of its value, earning the event the appellation “Black Monday.” Since then, we have endured the initial public offering (IPO) laddering and equity analyst scandals associated with the “dot-com bubble,” as well as accounting irregularities at Enron, Tyco, WorldCom, Adelphia and others. The loss of shareholders’ wealth with each of these events was profound, but none has been as severe as the one that currently has the world’s financial markets in its grasp.

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October 19th, 2009

Casualty Clash and Casualty Catastrophe Risks, Part I: Clashing and Catastrophic Casualty Events

Posted at 1:00 AM ET

metropoulos_emil_bioEmil Metropoulos, Senior Vice President
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Remoteness has been used to downplay the threat, causing carriers to overlook a more immediate, though less menacing, concern. A substantial loss may not imperil company operations, but it could lead to an unexpected earnings hit, the effects of which would be magnified for shareholders. Unanticipated large losses typically result in a disproportionate impact on market capitalization. Casualty clash and catastrophe protection, consequently, can be a vital tool in managing overall financial performance.

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July 6th, 2009

7/1 European Casualty Renewals

Posted at 1:01 AM ET

George Carrington, Managing Director and Head of European Casualty Specialty
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The July renewal does not affect a large number of cedents in Europe, but the programs that did renew suggest a continuation of the year’s broader themes. Hotspots across the market at the January renewal have persisted as expected, though the recent renewal was not robust enough to support forecasts for January 1, 2010.

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May 11th, 2009

Casualty Cat Part V: Case Study

Posted at 1:00 AM ET

metropoulos_emil_bioEmil Metropoulos, Senior Vice President
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Consider hypothetical commercial property construction and development company “X,” which has several high-profile commercial office projects around the world. In this scenario, the company was found to have massively underestimated both development costs (due in part to negligent risk management advice received from the insurer’s environmental audit team) and projected occupancy rental returns at two important commercial office sites in a major city (e.g., London, New York, Dubai, or Shanghai).

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May 7th, 2009

Casualty Cat Part IV: Casualty Cat Exposes Exposure

Posted at 1:00 AM ET

metropoulos_emil_bioEmil Metropoulos, Senior Vice President
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Developed by Guy Carpenter and Arium, Ltd., Casualty Cat facilitates the study of single- and multi-peril casualty catastrophe risks in an insurer’s broader risk management plan. Through a rigorous analysis of inter-industry trading and supply chain data, carriers can assess key vulnerabilities, providing a foundation for risk transfer planning and execution.

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May 5th, 2009

Casualty Cat Part II: Tracking Integrated, Intricate Risks

Posted at 1:00 AM ET

metropoulos_emil_bioEmil Metropoulos, Senior Vice President
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Casualty (re)insurers do not cover standalone risks. A steep drop in stock price, product defect with recall, or other event could lead to class action lawsuits and ultimately large claims. This emergent reality, however, is difficult to address. A carrier would need to identify the many possible starting points of a liability chain reaction and follow their rapidly spreading implications throughout a portfolio. Without powerful modeling technology, this process is time-consuming, impossible to complete, and likely to miss key threats and underlying exposures. Because of the impracticality of integrated liability risk management under these conditions, most casualty (re)insurers segment their efforts to protect their capital, for example, by geography or line of business. This approach leaves gaps, some of them quite wide. An anticipated directors and officers (D&O) claim for a particular insured may arise from an event that also triggers D&O — and possibly errors and omissions (E&O) — claims for other insureds. The losses begin to mount, often in excess of carrier expectations.

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