Posts Tagged ‘flood’



May 19th, 2016

Risk Analytic Tools, Part II

Posted at 1:00 AM ET

In addition to internal risk management, models are typically used in risk transfer negotiations. Both traditional and alternative risk markets require extensive analysis of portfolios when considering risk transfer. Sharing a portfolio’s standardized model output is critical to imparting the loss potential of a particular portfolio from which risk-capital can be unlocked to support the risk financing needs of a reinsurance buyer. Using technology is critical when partnering governments with the private sector. Whether partnering with developed or emerging economies, these tools bring together the risk knowledge and historical data of the public sector with risk management techniques of the insurance industry. The result is an enhanced understanding of risk that provides stability and attracts partners.

Continue reading…

May 3rd, 2016

Public Entities Approach to Risk Financing

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas posts on some of the drivers behind public entities considering new approaches to risk financing.

Continue reading…

April 20th, 2016

U.S. Southern Plains Flooding

Posted at 1:18 PM ET

us-flood-plains-small In southeast Texas, a significant flood event has affected the Greater Houston Metro area as well as areas north and west. Heavy and persistent rainfall has produced catastrophic flooding, enabled by a slow-moving upper low and frontal boundary, together with available moisture. Record daily rainfall amounts were observed at Houston International Airport, with amounts of 15 to 18 inches reported north and west of the Houston area. National Weather Service flood and flash flood watches and warnings remain active for areas of the Southern Plains and Lower Mississippi Valley and some additional rainfall is expected with thunderstorms. Media reports indicate at least seven fatalities and first responders expect this number to rise. Reports indicate that over 1,000 homes have been inundated. Texas Governor Greg Abbott has declared a state of disaster in nine counties, enabling state resources to be used to respond to the emergency, according to media reports. It will take some time to fully assess the scope and severity of impacts of this event and our thoughts are with those lost and directly affected by this event.

Continue reading…

March 30th, 2016

Risk Analytic Tools, Part II

Posted at 1:00 AM ET

In addition to internal risk management, models are typically used in risk transfer negotiations. Both traditional and alternative risk markets require extensive analysis of portfolios when considering risk transfer. Sharing a portfolio’s standardized model output is critical to imparting the loss potential of a particular portfolio from which risk-capital can be unlocked to support the risk financing needs of a reinsurance buyer. Using technology is critical when partnering governments with the private sector. Whether partnering with developed or emerging economies, these tools bring together the risk knowledge and historical data of the public sector with risk management techniques of the insurance industry. The result is an enhanced understanding of risk that provides stability and attracts partners.

Continue reading…

March 24th, 2016

US Flood – The Road Ahead

Posted at 1:00 AM ET

The National Flood Insurance Program (NFIP) is the primary underwriter of flood insurance policies in the United States. The program was established in 1968 through the passage of the National Flood Insurance Act.

Continue reading…

March 23rd, 2016

UK Flood – An Innovative Market Based Solution

Posted at 1:00 AM ET

For people living at high risk of flooding, finding affordable home insurance is becoming increasingly difficult and the problem is likely to get worse without action. The Association of British Insurers and the UK government formulated a plan following large scale flood events that highlighted the impact of severe flooding on homeowners and communities. The UK government’s preferred approach was the introduction of legislation that would create a flood reinsurance scheme - known as Flood Re - to help support households at highest flood risk with minimal market distortion. The households will be able to access affordable cover through the competitive home insurance market with a managed transition to more risk-reflective pricing over a 25 year period. The scheme provides support in the parts of the home insurance market that need it, which is likely to be around 2 percent of customers living in areas with the greatest risk of flooding. The Flood Re model depends on a statutory levy paid for by the UK insurance industry.

Continue reading…

March 22nd, 2016

Risk Financing for Flood: Emerging Opportunities

Posted at 1:00 AM ET

Flood is the largest contributor to catastrophic loss worldwide. Recent initiatives from Guy Carpenter and Marsh & McLennan Companies, both involving the peril of flood, demonstrate the diversity of approaches that can be brought to bear. In the United Kingdom, we are involved in a project where the insurance industry is working in concert with the government to adjust the industry’s approach to the peril of flood and maintain the private sector’s role as the source of insurance protection without a resultant increase in the public sector’s liability. In the United States, a project is being sponsored by the Federal Emergency Management Agency and the US Congress to determine how the National Flood Insurance Program might be privatized and how it might utilize reinsurance to support its risk management efforts, and thereby move potential loss exposure off the public balance sheet.

Continue reading…

March 21st, 2016

Guy Carpenter Cites El Niño and North Atlantic Oscillation as Key Climate Drivers in 2015

Posted at 11:30 PM ET

Guy Carpenter today reported that 2015 marked one of the strongest El Niño periods on record, while a positive phase of the North Atlantic Oscillation (NAO) was evident both at the beginning and close of the year.

Continue reading…

March 8th, 2016

Risk Awareness

Posted at 1:00 AM ET

Identifying, prioritizing, selecting, executing and monitoring results of risk management projects are essential. As noted by the US Government Accountability Office in their post Hurricane Sandy review, an investment strategy would help the Federal Government enhance resilience for future disasters. Unless a clear risk-return framework is established, the opportunity to reduce publically held exposure will be challenging and the inertia around the status quo could endure until loss events occur that force reactionary funding from the public sector (1).

Continue reading…

March 7th, 2016

The Fundamental Challenges In Unlocking Publicly Held Loss Exposure and The Role of Public-Private-Partnerships

Posted at 1:00 AM ET

Despite growing awareness of the challenges associated with managing risk, there is much work to do in bringing together the public and private sectors to solve for this growing need. Fortunately, all potential participants acknowledge that in the current environment collaborating to develop solutions will benefit all stakeholders. For example, involvement on the part of the (re)insurance industry in sustainable partnerships to manage risks held by government has become more pronounced. Insurers from across the globe, representing 20 percent of world premium volume with USD 14 trillion in assets under management, have partnered with the United Nations to strengthen the industry’s commitments to sustainable development and to establish Principles for Sustainable Insurance (PSI). PSI launched a Global Risk Map (1) to highlight the economic and social cost of natural disasters. Insurers have committed to concrete actions on risk management, insurance products, investment, partnerships and disclosure frameworks that support disaster risk reduction, climate change adaptation and mitigation. The Principles are part of the insurance industry criteria of the Dow Jones Sustainability Indices and FTSE4Good (2). The process must start somewhere and if incremental steps can start across the fundamental challenges, sustainable traction can be built over time.

Continue reading…