Posts Tagged ‘macroeconomic’



February 6th, 2017

Evolving Risks Landscape: 2008—2017

Posted at 1:00 AM ET

Social and environmental risks have supplanted economic ones as issues of greatest concern among respondents to the Global Risks Perception Survey. The survey was completed by almost 750 members of the World Economic Forum’s global multistakeholder community and the results analyzed in the World Economic Forum 2017 Global Risks Report, which was published by the World Economic Forum with support from Marsh & McLennan Companies and other partners.

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February 2nd, 2017

Public Sector Risk Financing Perspectives – Terror Risk: Part IV

Posted at 1:00 AM ET

emma-karhan-sm1Emma Karhan, Managing Director

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Insurance is about the pooling of risk and providing support for impacted economies. Expanding insurance coverages to achieve these objectives against terror losses requires a more granular level of insight into the impacts of terrorist attacks. We have a relatively high level of loss impact knowledge for mature lines of business, such as property catastrophe coverages; this has been driven by losses and the ensuing needs for modeling and pricing improvements. However, the terrorism market is a less mature market that has not suffered a frequency of significantly large insured losses that would otherwise assist in a better understanding of the nature of the peril and its direct and indirect impacts on an economy. Additionally, this peril has the added complexity of unpredictable behavioral factors of terrorists that are very difficult to sensibly and consistently be included in pricing models. Consequently, the (re)insurance industry needs to devise improved transparency through innovative modeling and pricing methodologies to ensure that capital continues to support this line of business - underpinning further product development.

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January 31st, 2017

Public Sector Risk Financing Perspectives – Terror Risk: Part III

Posted at 1:00 AM ET

emma-karhan-smEmma Karhan, Managing Director

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The (re)insurance industry needs to be more proactive in understanding and defining the boundary and extent of insured loss along with understanding the types of targets that have a higher probability of attack. Data in the Global Terrorism Database (1) identifies small businesses, retailers, tourist attractions and transportation hubs as increasingly likely targets, not iconic targets such as New York’s World Trade Center, in 2001. These smaller and less iconic targets are typically more vulnerable to the evolving type of terrorism attack (marauding arms, small explosives) that, while causing smaller direct physical damage and losses, still have the potential for significant contingent losses.

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January 30th, 2017

Public Sector Risk Financing Perspectives – Terror Risk: Part II

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emma-karhan-smEmma Karhan, Managing Director

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The dynamic of pricing decrease and oversupply of capital has also been driven by the industry’s need to diversify into non-natural catastrophe lines of business in the current economic environment, and the fact that the terror market has a loss ratio of almost zero percent. In 2015, Swiss Re’s Sigma report calculated that 27 terrorist events resulted in 1082 fatalities, but no insured losses. Unlike other lines of business, recent pricing and capacity trends have not been driven by a better technical understanding of the impact of losses that normally translates into improved peril understanding or advances in pricing or modeling techniques. This has generally inhibited the industry from expanding its product base for terrorism in line with the evolution of the peril, concentrating more on supporting the pools and the current established bounds of insurable loss.

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January 26th, 2017

Public Sector Risk Financing Perspectives – Terror Risk: Part I

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emma-karhan-sm1Emma Karhan, Managing Director

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The (re)insurance industry should look towards closing the gap between economic and insured terror losses.

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January 24th, 2017

Public Sector Risk Financing Perspectives in Asia Pacific: Part II: Highlights of Recent Initiatives

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graham-jones-smGraham Jones, Senior Vice President

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In July 2016, the China Residential Earthquake Insurance Pool (CREIP) was jointly established by the China Insurance Regulatory Commission (CIRC) and Ministry of Finance. In development since 2014, the scheme consists of 45 insurers distributing policies with basic limits of USD 7,500 and USD 3,000 for urban and rural residents, respectively. Coverage up to a maximum limit of USD 150,000 is negotiable. The claims process has been simplified with payouts equaling zero, 50 or 100 percent of the policy limit based on five damage levels.

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January 23rd, 2017

Public Sector Risk Financing Perspectives in Asia Pacific: Part I

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graham-jones-smGraham Jones, Senior Vice President

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According to United Nations estimates, 54 percent of the world’s population lives in Eastern, Southern and Southeastern Asia. The region hosts 778 million urban inhabitants and seven out of the world’s top ten most populated cities. The region is also home to every major peril - from cyclone to tsunami - and has experienced some of the world’s largest catastrophes based on economic loss. While there are natural catastrophes all over the world, Asia is a unique confluence of people and perils.

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January 20th, 2017

Survey: Geopolitical Risk Is Now a Top Concern for Finance Professionals

Posted at 1:00 AM ET

2017risksurvey_cover-thumbnail-smGeopolitical risk is having a bigger impact on earnings than ever before — and senior management and boards are taking notice.

According to the 2017 Association for Financial Professionals Risk Survey, supported by Marsh & McLennan Companies, 49 percent of finance professionals believe their organizations are exposed to greater earnings uncertainty than they were three years ago.

In addition, 52 percent of Treasury & Finance functions are considering the impact on their organization’s growth expectations due to a geopolitical event. That’s no surprise given that 46 percent say their C-suite and board were concerned about geopolitical risk in 2016.

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January 13th, 2017

Global Risks Report 2017

Posted at 1:00 AM ET

global-risks-report-landing-page-sm1The Global Risks Report 2017, produced by the World Economic Forum with support from Marsh & McLennan Companies and other partners, was published this week. Now in its twelfth edition, the report provides insights into the key global risks facing businesses as well as the collective view of risk experts in all sectors as to the most significant threats to global prosperity over the next decade. The Global Risks Report 2017 will inform discussions at the World Economic Forum’s annual meeting next week in Davos, Switzerland.

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December 22nd, 2016

Public Sector Risk Financing Perspectives in the United States: The Market for Mortgage Credit Risk (Re)Insurance: Part II

Posted at 1:00 AM ET

krohn_jeff_photo_crop-sm1tedeschi_john_photo_sm21Jeff Krohn, Managing Director and John Tedeschi, Managing Director

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(Re)insurance markets sold close to USD 8 billion of government sponsored entities (GSEs) mortgage credit risk transfer from 2013 to 2016 year-to-date, with significantly more planned on a consistent basis. A robust global credit risk transfer market is now in full-effect; recent transactions include the Credit Insurance Risk Transfer and Agency Credit Insurance Structure (re)insurance purchased by Fannie Mae and Freddie Mac, and capital bond issuances from Fannie Mae’s Connecticut Avenue Securities and Freddie Mac’s Structured Agency Credit Risk.

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