Posts Tagged ‘mega-catastrophes’



March 1st, 2010

8.8 Mw Earthquake in Chile

Posted at 2:27 PM ET

chile1smallA massive earthquake struck off the coast of Maule in Chile at 06:34 UTC on February 27(03:34 local time), causing severe damage across of the country and claiming more than 700 lives in Chile’s biggest earthquake for around 50 years. The earthquake, measuring 8.8 Mw, was located 60 miles (100 kilometers) north-northwest of Chillan and 200 miles (325 kilometers) southwest of Santiago, according to the US Geological Survey (USGS). The USGS added that the quake was centred about 21.7 miles (35 kilometers) underground and was felt in Argentina. This is the fifth largest earthquake ever to be recorded, according to the USGS. Around 150 aftershocks have hit the region since the main earthquake, the most powerful at 6.9 Mw.

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July 10th, 2009

Get the Most Out of Cat Models, Part V: Creating New Ideas

Posted at 1:15 AM ET

hurricaneJohn Tedeschi, ACAS, MAAA, Managing Director and Chief of Catastrophe Modeling
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Catastrophe models may be invaluable, but they are not all-encompassing. The vendors tend to focus on what can be known — and quantified — which leaves some parts of (re)insurer portfolios unaddressed. Depending on the nature of these gaps, carrier exposures can remain quite high, diluting substantially the effects of any risk management planning and execution. To alleviate this concern, reinsurance brokers have extended catastrophe model capabilities with a variety of tools to help clients limit their exposures further. Guy Carpenter has developed several model enhancements — such as GC LiveCatTM and GC ForeCatTM, available through the i-aXs platform — to facilitate risk identification and capital management beyond the capabilities of the major catastrophe modeling firms.

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July 9th, 2009

Get the Most Out of Cat Models, Part IV: The Reinsurance Broker’s Role

Posted at 1:15 AM ET

hurricaneJohn Tedeschi, ACAS, MAAA, Managing Director and Chief of Catastrophe Modeling
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The term “reinsurance broker” does not reflect the full role that an intermediary plays in helping clients manage risk. While brokers do facilitate the movement of risk out of cedent portfolios, the process entails much more than placing a program. In fact, a reinsurance broker is as much an advisor as a broker, working with its clients to understand the many choices available — from models to structures to markets — and develop the optimal solutions based on risk appetite, tolerance, and profile.

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July 8th, 2009

Get the Most Out of Cat Models, Part III: Model Diversification

Posted at 1:15 AM ET

hurricaneJohn Tedeschi, ACAS, MAAA, Managing Director and Chief of Catastrophe Modeling
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There are many modeling perspectives for a reason. Even among the three largest firms — AIR, RMS, and EQECAT — differences are noticeable, as each company has developed its own set of unique strengths. The breadth of results only serves to benefit (re)insurers … as long as they take advantage of it. Limiting catastrophe modeling efforts to only one of the major vendors, even if it’s best-suited to a particular region or peril, can lead to gaps in coverage, unanticipated insured losses, and the destruction of shareholder value. As cedents diversify among perils, regions, and even among reinsurers, therefore, they also could protect their capital by diversifying the models they use.

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July 7th, 2009

Get the Most Out of Cat Models, Part II: Lessons from Ike

Posted at 1:15 AM ET

hurricaneJohn Tedeschi, ACAS, MAAA, Managing Director and Chief of Catastrophe Modeling
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It has taken many months for the (re)insurance industry to digest the effects of Hurricane Ike and its impact continues. One of the largest natural catastrophes in history in terms of insured losses, the Gulf of Mexico storm was in part overshadowed by the simultaneous financial catastrophe that struck business centers around the world. The implications of both emerged at the same time, as risk managers sought to keep pace with damage to both the asset and liability sides of the balance sheet.

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July 6th, 2009

Get the Most Out of Cat Models, Part I: Manage the Unknown

Posted at 1:15 AM ET

hurricaneJohn Tedeschi, ACAS, MAAA, Managing Director and Chief of Catastrophe Modeling
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Insurer and reinsurer reliance on catastrophe models has become part of the fabric of risk management. Though they provide guidance rather than clear courses of action, these tools help quantify risk and deploy their capital as effectively as possible. But, they aren’t perfect. Every catastrophe model has specific strengths and weaknesses, which is why risk-bearers tend to use several models to evaluate exposures, with the final decisions on whether to cover a particular risk shaped by loss history, company objectives and risk manager judgment. As a result, models are crucial to (re)insurer success … as long as they are used properly.

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November 12th, 2008

Financial Catastrophes: No Storm, Plenty of Damage

Posted at 1:00 AM ET

Andrew Marcell, CEO of Americas
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We live in a world at risk, but sometimes, the threats take new forms. Even as we are coming out of an above-average U.S. storm season, carriers are focused on a new type of disaster. Throughout 2008, every major city in the world felt the reverberations of a “financial catastrophe,” triggered by the collapse of the subprime mortgage market. This event has put severe pressure on both sides of the balance sheet and proved that an economic event can have the power to move the market.

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October 28th, 2008

Alternatives to Alternative Capital

Posted at 8:01 PM ET

David Piebe, Chairman of Global Client Development
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(Re)insurers have come to expect that alternative sources of capital will always be available. Private equity funds, hedge funds, and other alternative investment vehicles have contributed copious capacity to risk-bearers since the turn of the millennium, and especially following the 2005 storm season. The well, however, may be at risk of running dry.

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October 28th, 2008

Protect Your Enterprise from Casualty Catastrophes

Posted at 2:00 PM ET

Emil Metropoulos, Senior Vice President
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When mega-catastrophes occur, we tend to think about large-scale property damage. Until recently, hurricanes, earthquakes, and terror dominated the conversation. A new type of catastrophe has emerged, however, with the potential to cause more economic damage and perhaps even higher insured losses. Casualty catastrophes involving product and professional liability can spread quickly, destroy considerable amounts of shareholder wealth, and take years to resolve completely. In the past, carriers were unable to address this form of risk sufficiently, and balance sheets have remained imperiled.

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