Posts Tagged ‘GC Securities’



January 15th, 2015

Public Entities, Insurers of Last Resort and Compulsory Cat Pools and Disaster Facilities

Posted at 1:00 AM ET

The use of capital markets-based risk transfer capacity by public entities, insurers of last resort, and compulsory catastrophe pools and disaster facilities continues to expand. These deals included Turkey’s Turkish Catastrophe Insurance Pool, Mexico’s FONDEN and New Zealand’s EQC. Most large U.S. insurers of last resort, such as CEA, Citizens (FL), Citizens (LA), North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association (NCJUA/NCIUA), and Texas Windstorm Insurance Association, are utilizing capital markets capacity including collateralized reinsurance and catastrophe bonds.

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January 13th, 2015

GC Capital Ideas Top Chart Room Entries: For the Year 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the year of 2014:

 

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

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2. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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3. Chart: Regional Property Catastrophe ROL Index: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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4. Chart: Evolution of Dedicated Reinsurance Capital, 2012 - YE 2013: The evolution of dedicated sector capital is presented in the chart. Guy Carpenter estimates this rose marginally in 2013 to USD322 billion at year-end as underwriting profits from low catastrophe claims and convergence capital inflows offset unrealized losses, sustained share buybacks and dividend payments.

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5. Chart: Catastrophe Bond Issuance and Capital Outstanding: Issuance reached a record high of USD7.1 billion, surpassing 2007’s total. Risk capital outstanding also reached an all-time high of USD18.6 billion last year.

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6. Chart: 2013 Catastrophe Bond Transactions: This table lists the 144A property/casualty catastrophe bond transactions that were completed in 2013.

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7. Chart: Top Ten Catastrophe Bond Transactions: The chart ranks deals in 2013, as compiled by GC Securities*, a division of MMC Securities Corporation. 

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8. Chart: Pension Fund Capital Under Management and Allocations into Reinsurance: As the chart illustrates , pension funds alone are worth around USD30 trillion. Based on Guy Carpenter’s analysis of possible capital allocation percentages to the (re)insurance space in consultation with sector experts, a maximum of USD900 billion of this amount could potentially be available for insurance-linked investments. This figure is, of course, much greater than currently needed, demonstrating the existing convergence-driven supply excess. Given Guy Carpenter estimates global property catastrophe limit is currently in excess of USD300 billion, and the ILS market only accounts for around 15 percent of this amount, pension funds have so far made very small investments in reinsurance relative to their overall size.

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9. Chart: U.S. Property Catastrophe Reinsurance Quoting Behavior: In this chart, the January 1, 2014 average quote across all programs is represented by the line at 0 percent, while the red dots indicate reinsurers’ distances from the mean across all the programs that they quoted. The size of the line represents the variability from the average for all quotes provided by the reinsurer. Each reinsurer is represented across the bottom of the chart by its A.M. Best rating. Quotes representing non-concurrent terms were excluded.

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10. Chart: European Property Catastrophe - Typical ROL Changes: The chart compares changes at January 2014 with January 2013.

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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 12th, 2015

GC Capital Ideas Top Chart Room Entries: Fourth Quarter, 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the fourth quarter of 2014:

 

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

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2. Chart: Catastrophe Bonds Versus Various Other Capital Market Assets Classes: Chart shows the cumulative return profile of 144A catastrophe bonds (as a proxy for all capital markets-based risk transfer capacity) versus various other capital market asset classes through mid-year 2014.

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3. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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4. Chart: Private Catastrophe Bonds Mid-Year 2014: Chart shows the evolution of private catastrophe bonds through mid-year 2014 based on deal count and total aggregate limit placed.

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5. Chart: Catastrophe Bond Capital Growth Mid-Year 2014: Chart shows the growth in 144A catastrophe bonds through mid-year 2014 with capital outstanding reaching a record high.

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6. Chart: Regional Property Catastrophe ROL Index: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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7. Chart: Combined Ratio for Guy Carpenter Composite, H1 2014: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through first half, 2014.

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8. Chart: Return On Equity For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2004 through first half, 2014.

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9. Chart: Evolution of Shareholders’ Funds For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents the evolution of shareholders’ funds for the Guy Carpenter Global Reinsurance Composite, 2012 through first half, 2014.

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10. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for the first half, 2014 compared to first half, 2013.

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Click here to view additional materials in GC Capital Ideas’ Chart Room >>

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Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 8th, 2015

Chart: Catastrophe Bond Issuance and Capital Outstanding - 1997 to YE 2014

Posted at 3:28 PM ET

The chart below presents catastrophe bond issuance through 2014, a record setting year. 

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January 6th, 2015

January 1, 2015 Renewals See Lower Pricing and Broader Coverage for Clients

Posted at 11:30 PM ET

Guy Carpenter reports reinsurance pricing fell at the January 1, 2015 renewals in many segments, affecting almost all lines of business and geographies, continuing recent renewal trends.

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January 5th, 2015

GC Securities* Completes First Ever Swiss Franc-Denominated Private Catastrophe Bond (“Gurten”) Benefitting Gebäudeversicherung Bern

Posted at 10:30 PM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the Regulation S placement of Principal At-Risk Variable Rate Notes (”Notes”) due January 15, 2016, with notional principal at CHF70,000,000 through Kaith Re Ltd., to benefit Gebäudeversicherung Bern (”GVB”). This is the first ever Swiss franc-denominated catastrophe bond and the first time that GVB has utilized the cat bond market to manage its risks.

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December 31st, 2014

Catastrophe Bonds New Cedents

Posted at 1:00 AM ET

New cedents continued to enter the catastrophe bond space in 2014. Seven new sponsors (American Strategic Insurance Group, Everest Re, Generali, Great American, Heritage, Sompo Japan Nipponkoa and Texas Windstorm Insurance Association) utilized the 144A catastrophe bond market for the first time in the first half of 2014. Additionally, several new sponsors entered the private catastrophe bond  market. They included, but were not limited to, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and Achmea.

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December 30th, 2014

Private Catastrophe Bonds

Posted at 1:00 AM ET

The growth in the utilization of private catastrophe bonds continues at similar rates. Private catastrophe bonds provide the same benefits as 144A catastrophe bonds, including fully collateralized, multi-year protection, but private bonds are more cost-effective and allow for more streamlined documentation given the typically smaller limit size of each transaction. The figure below shows the evolution of private catastrophe bonds based both on deal count and total aggregate limit placed. In an environment of growing demand for capital markets capacity, GC Securities*, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC, formulized its private catastrophe bond approach in June 2013 with development of the Tensai private catastrophe bond program in conjunction with Tokio Millenium Solutions’ Shima Re Ltd. facility.

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December 29th, 2014

Capital Markets Capacity: Growth Dominates in 2014: Part II

Posted at 1:00 AM ET

Capacity outstanding and size of the overall global property catastrophe limit continued to expand for all forms of capital markets capacity (144A catastrophe bonds, private catastrophe bonds, collateralized reinsurance and sidecars).

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December 23rd, 2014

The Reinsurance Evolution Continues: Executive Summary

Posted at 1:00 AM ET

During the past twelve months, capital has continued to flow into the reinsurance markets in the form of both insurance-linked securities (ILS) and collateralized reinsurance transactions. This report examines the growth in the ILS market during the past year and some of the important evolutionary elements of catastrophe bond structure and risk transfer. We also explore how the use of capital markets-based capacity provides cost savings for public entities by helping them build surplus, reduce public debt and limit the risk that natural perils can pose to the state’s balance sheet. As collateralized markets continue to increase in importance as an alternative to both traditional reinsurance and ILS, Guy Carpenter has taken an active role in analyzing counterparty risk and developing specific structures and strategies to manage this risk. This report also provides an overview of the manner in which Guy Carpenter assists its clients in managing counterparty risk and limiting credit exposure.

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