Posts Tagged ‘FHCF’



October 25th, 2014

Hurricane Seasons That Changed The Industry: Landmark 2005 Hurricane Season

Posted at 7:30 AM ET

Guy Carpenter & Company released Part II of the two-part Ten-Year Retrospective of the 2004 and 2005 Atlantic Hurricane Seasons. Part II focuses on the 2005 hurricane season and the cumulative impacts of both the 2004 and 2005 seasons on the (re)insurance industry as well as the changes made in response to these two landmark seasons from both catastrophe model vendors and rating agencies.

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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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June 2nd, 2011

Wide Range of Outcomes Seen in June 1, 2011, Florida Reinsurance Renewals

Posted at 8:00 AM ET

David Flandro, Managing Director, Head of Global Business Intelligence
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Lara Mowery, Managing Director, Head of Global Property Specialty
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Kevin Stokes, Executive Vice President, Head of Florida Business Unit
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The June 1, 2011, renewals took place against the backdrop of record first-half catastrophe losses and uncertainty surrounding the release of version 11 of Risk Management Solutions’ (RMS) U.S. hurricane model. The heavy international natural catastrophe-related losses that occurred during the first quarter of 2011 - combined with the multi-billion dollar losses from tornadoes in the United States in April and May - have added to significant loss activity over the past 16 months, culminating in insured losses of close to USD100 billion.

Catastrophe activity and two major catastrophe model revisions (RMS v11 this spring, which was preceded by AIR v12 last fall) led to a volatile renewal.

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November 11th, 2010

Turn Insurance Portfolio Modeling and Management into a Strategic Advantage

Posted at 1:01 AM ET

tedeschi_john_gcciJohn Tedeschi, Chief of Catastrophe Modeling
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Companies that optimize the use of economic capital models to holistically manage portfolios may gain a powerful advantage in the marketplace. Improved risk decision-making and capital allocation can translate to profitable growth and an increase in shareholder value. But, it takes a commitment: ongoing integration and evaluation of the models in the operation may create ongoing benefits to results.

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June 18th, 2010

2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks: Index

Posted at 2:00 AM ET

2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks, Part I: State of the Florida Marketplace:   The 2010 hurricane season kicked-off on June 1 and the meteorological forces wasted no time in getting down to business. Tropical storm Agatha slammed into Central America, killing at least 101 people. The hurricane season kick-off and the storm occurred as backdrops to the wrap up of the June 1, 2010 reinsurance renewals, traditionally centered on the Florida property marketplace.

2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks, Part II: Florida Hurricane Catastrophe Fund, Innovative Products: One of the critical components in the majority of Florida contracts renewing at June 1 is the structure of the Florida Hurricane Catastrophe Fund (FHCF). While factors influencing the FHCF structure overall were dealt with earlier than in prior years, there remained questions regarding the viability of the TICL layer and rating agencies’ treatment of TICL within the reinsurance structure.

2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks, Part III: 2010 Hurricane Forecast: To coincide with the start of the hurricane season, Guy Carpenter has summarized the various forecasters’ predictions for the 2010 season. Several meteorologists have released forecasts for the forthcoming hurricane season and there seems to be a general consensus that 2010 will see unusually high activity. If this prediction proves to be true, the 2010 hurricane season will stand in sharp contrast to the relatively quiet 2009 season.

2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks, Part IV: Tools for Understanding and Managing Risk: Guy Carpenter offers the solutions to help (re)insurers manage the risks associated with hurricane exposures and preparedness through our forward looking hazard forecasting tools. Assessing the impact and potential loss damage of hurricane activity on a risk portfolio can now be accomplished with more detailed information than ever before.

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June 11th, 2010

2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks, Part II: Florida Hurricane Catastrophe Fund, Innovative Products

Posted at 1:00 AM ET

Lara Mowery, Managing Director and Julian Alovisi, Senior Vice President
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Florida Hurricane Catastrophe Fund

One of the critical components in the majority of Florida contracts renewing at June 1 is the structure of the Florida Hurricane Catastrophe Fund (FHCF). While factors influencing the FHCF structure overall were dealt with earlier than in prior years, there remained questions regarding the viability of the TICL layer and rating agencies’ treatment of TICL within the reinsurance structure. In 2009 there was considerable concern regarding the viability of this upper layer of coverage due to the impact of the financial crisis on the municipal bond market, which the FHCF utilizes to pay post event claims above their available cash on hand. Statutorily, the legislature reduced coverage offered by USD2 billion to USD10 billion last year. Due in part to companies’ concerns regarding the timing of payments received from TICL, only USD5.56 billion was taken up. Of this, approximately 65 percent was selected by Citizens Property Insurance Corporation (Citizens).

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June 1st, 2010

June 1 Reinsurance Rate Decreases are One Positive Development for Florida Companies

Posted at 1:00 AM ET

Lara Mowery, Managing Director

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At each Florida renewal season there are many challenges companies face in designing and placing their reinsurance programs. This year was no exception. While companies deal with navigating the challenges of the Florida Hurricane Catastrophe Fund (FHCF) integration each year, 2010 also included heightened commentary by rating agencies regarding acceptable risk transfer approaches, the Florida Office of Insurance Regulation’s (OIR’s) own views on risk transfer and an environment of continuing economic turmoil specific to the Florida insurance environment.

In a positive development for these companies, reinsurance pricing continued its 2010 trend of price declines and dropped year over year on a risk adjusted basis by 10 percent to 12 percent on average. This drop returns pricing to a level close to that seen in 2008, particularly in upper layers.

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June 1st, 2009

Florida Renewal up 15%, Follows the Global Trend

Posted at 12:45 AM ET

hurricaneLara Mowery, Managing Director and Head of Global Property Specialty
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Property-catastrophe reinsurance rates increased by 15 percent at the Florida-centric June 1, 2009 renewal — compared to a 15 percent decline a year ago. Capacity was more limited than in recent years — however, still adequate to complete renewals. Though the ultimate result was higher than the 10 percent to 14 percent change for U.S. national reinsurers at April 1, 2009, the intricacies of the Florida market render it directionally consistent with the overall rate trend for this year. Constraints on capital have pushed risk-transfer pricing higher, but shortages were not so severe that rates spiked as they did in 2006.

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May 28th, 2009

Florida Update: HB 1495 Becomes Law

Posted at 6:00 PM ET

Florida Governor Charlie Crist signed the omnibus insurance bill (HB 1495) into law yesterday, along with 40 other bills. Over the next six years, this measure is intended to reduce the state’s property-catastrophe exposure to USD12 billion, with private reinsurers making up the difference.

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