Tropical Storm Karen is poised to become the first named storm to hit the United States this season. Karen, as of 2PM Eastern Daylight Time, was 240 miles south-southwest of the mouth of the Mississippi River and 275 miles south-southeast of Morgan City, Louisiana. The storm is moving north-northwest at ten miles per hour. According to the NHC, a turn toward the north and a decrease in forward speed are expected by early Saturday, with a turn toward the northeast on Sunday.
Posts Tagged ‘Florida’
David Priebe, Vice Chairman, Guy Carpenter, comments on the direct impact the new capital is having on reinsurance pricing. “The impact of the new capital has been most dramatic in the US during 2013. For the first time, the ILS market offered prices comparable to or lower than those of the established reinsurers, ending the general stability and consensus of post-Katrina catastrophe pricing, especially in Florida. Strong appetite tightened spreads for US hurricane catastrophe bonds forcing the traditional reinsurers to react by cutting Florida risk-adjusted renewal prices by around 15 percent at the June 1 renewal. It was a tipping point for the reinsurance industry.”
In its sixth annual press briefing held at the Reinsurance Rendez-Vous 2013 in Monte Carlo, Guy Carpenter & Company, LLC, the leading global risk and reinsurance specialist and member of Marsh & McLennan Companies (NYSE: MMC), considered the impact of new capacity on current market conditions and explored where the opportunities exist for profitable growth in such an environment.
As we look toward the July 1 reinsurance renewal next week, here we review the key GC Capital Ideas stories that have covered the prior renewals this year.
Guy Carpenter & Company reports that the reinsurance sector has witnessed dynamic capital growth in 2012 and 2013, spurred by an influx of capital from alternative sources. In its June 2013 renewal briefing, Guy Carpenter finds that this surge in alternative or “convergence” capital has changed the nature of the sector’s capital structure, as investors grow increasingly comfortable with supplying capacity through a convergence of both traditional and alternative vehicles. This market dynamic has also begun to impact significantly reinsurance pricing for peak property catastrophe risks in the U.S., with surplus capacity and lower target returns driving downward pressure on pricing for June 1 renewals and likely through the remainder of 2013.
Hurricane Sandy poses a significant threat to the Atlantic Coast from North Carolina to Newfoundland this weekend into next week. The interaction of Sandy with a cold frontal system will lead to a historic “nor-easter” type cyclone. Threats include storm surge, tropical storm or hurricane force winds, and excessive rainfall. Power outages, coastal damage, with downed trees and power lines are possible over a very large area from North Carolina to Nova Scotia. The exact track is still very uncertain, and interests along the entire Atlantic East Coast should closely monitor the progress of this system.
Hurricane Sandy has the potential to interact with a frontal system leaving the U.S. coast, causing the development of a “nor-easter” type of post-tropical cyclone. The feature could then drift westward into the northeastern United States this weekend into next week. Interests along the U.S. East Coast should monitor this system closely. A more imminent threat is already underway for Jamaica, Cuba, Florida and the Bahamas.
Tropical Storm Isaac continues to intensify as it continues its slow trek through the Northern Gulf. Isaac threatens the Northern Gulf seven years following the landfall of Hurricane Katrina, and marking what will be the first U.S. landfalling hurricane in the area since 2008.
Tropical Storm Isaac is presently moving west, to the south of Puerto Rico, following several days of westward motion at the base of the subtropical ridge. The National Hurricane Center (NHC) anticipates that this motion will continue for the immediate-term, followed by a gradual turn to the west-northwest this evening. This motion is expected to continue through Saturday. The center of circulation should pass to the south of Puerto Rico today, and then near or over the south coast of the Dominican Republic and Haiti on Friday. Gradual intensification is expected by the NHC over the next 48 hours, and Isaac could well become a hurricane as it approaches the Dominican Republic and Haiti.