Posts Tagged ‘Month in Review’



February 1st, 2016

GC Capital Ideas Top Stories: January, 2016

Posted at 1:00 AM ET

1. Guy Carpenter Reports Stable Capital at January 1, 2016 Renewals: Guy Carpenter & Company reports that overall capital levels dedicated to reinsurance have stabilized, showing no growth for the first time in several years.  In a highly competitive environment, companies assessed broader opportunities and the rate of incoming capital slowed. However, moderate loss experience kept capacity at abundant levels for the January 1, 2016 renewals. The continued scarcity of costly catastrophe losses and more than adequate capacity led to reinsurance pricing reductions, although there are signs the rate of descent is slowing as compared to 2015.

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2. Chart: Global Property Catastrophe ROL Index 1990 to 2016: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2016.

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3. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

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4. Chart: Regional Property Catastrophe ROL Index, 1990 to 2016: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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5. Developments in Asia Pacific: Overview: Asia Pacific is a diverse mix of countries encompassing nearly one-third of the earth’s landmass and more than one half of its population. Given the broad spectrum of economic and regulatory sophistication across the region, the approach to insurance regulation has varied on a country-by-country basis as each regime adapts solvency principles to their own needs and political realities.

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6. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

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7. Chart: Catastrophe Bond Issuance and Capital Outstanding - 1998 to YE 2015: The chart presents catastrophe bond issuance through 2015. Total bond issuance for the year 2015 was the fourth highest historically.

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8. Guy Carpenter Names Matthias Meyenhofer as Head of Global Partners EMEA: Guy Carpenter & Company, LLC, announced the appointment of Matthias Meyenhofer as Managing Director, Guy Carpenter, effective immediately.

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9. Chart: Estimated Dedicated Reinsurance Sector Capital, 2012 to YE 2015: The chart shows that a preliminary estimate of total capital dedicated to reinsurance is approximately USD 400 billion, unchanged from the previous year.

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10. Chart: Significant Insured Losses - 2011 to YE 2015: Reports losses by quarter.

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January 4th, 2016

GC Capital Ideas Top Stories: December, 2015

Posted at 1:00 AM ET

1. The Rise of Emerging Risk and Casualty Catastrophe Models: The modeling of emerging and casualty catastrophe risks remains challenging and the models continue to vary in their approach, level of development and industry acceptance. With the potential scenarios numerous, diverse and constantly changing, there is no single model or approach that could contemplate all of them. Furthermore, the various disaster scenarios with which carriers are being increasingly confronted needs to be prioritized and synthesized within their enterprise risk management framework. By their very definition, there may be limited data on hand on which to base any modeling. As a result, much of the industry continues to rely on multiple models and actuarial approaches that encompass model applications, probable maximum loss (PML) estimates, realistic disaster scenarios, experience and exposure ratings to create a broad set of scenarios and deterministic views.

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2. GC Securities* Report Shows Catastrophe Bond Market Continues to Hold Steady: GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, released a briefing and analysis of catastrophe bond activity for the third quarter of 2015, which shows healthy activity across the market and marks the fourth highest third quarter catastrophe bond issuance on record.

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3. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

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4. Chart: Combined Ratio For Guy Carpenter Reinsurance Composite, Q3 2015: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through third quarter 2015.

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5. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

Read the article>>

  

6. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

Read the article>>

 

7. Update on China Counterparty Risk Charges for Offshore Reinsurers: China’s developing insurance market is a potential bright spot for growth in an otherwise challenging landscape for global reinsurers. Driven by a maturing economy and expected increases in household penetration ratios, property/casualty insurance premium, totaling USD 121.6 billion in 2014, is projected to increase to roughly USD 300 billion by 2030.

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8. Managing Catastrophe Model Uncertainty, Issues and Challenges: Here we repeat our series authored by John Major, which focuses on the issues and challenges in managing catastrophe model uncertainty. 

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9. Developments in Europe: Solvency II: After a long period of discussion and many delays, the new European insurance regulatory regime, Solvency II, will commence in January 2016. The rules will be compulsory for all insurance and reinsurance companies and groups in the European Economic Area (EEA). The three pillar approach of Solvency II for (i) quantitative capital requirements, (ii) qualitative risk management standards and (iii) reporting specifications, was derived from the international banking sector regulation (Basel II and Basel III). The Solvency II rules were developed over a period of more than 15 years, and there are many reasons for the long delay. Two notable reasons are differing business models from country to country and pressure on long-term guarantee products.

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10. Guy Carpenter Announces MetaRisk® 8.1, the Latest Version of its Premier Economic Capital Modeling Tool Suite: Guy Carpenter announced the release of MetaRisk® 8.1, the latest version of the industry’s leading dynamic financial analysis platform.

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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.

December 1st, 2015

GC Capital Ideas Top Stories: November, 2015

Posted at 1:00 AM ET

1. Marsh & McLennan Companies Publishes Cyber Risk Handbook: Cyber risk is an escalating threat and one of the most challenging issues facing the world today. Attacks are becoming more frequent, more intense and more sophisticated. Motivations are wide-ranging - from financial gain to threatening critical infrastructure and national security - and the nature of attacks is constantly changing. With cyber risk, there is an active adversary so defenses need to be increasingly sophisticated to keep pace.

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2. Cyber Risks: Aggregation: Businesses and (re)insurers should be concerned by risk aggregation, given the possibility of single attacks leading to losses across a large number of firms, which can create counter-party risk for the insured and potential failure for the insurer. At the moment, a large systemic event has not materialized, but that does not mean that the risk is not present.

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3. New Products Revealed as Biggest Growth Opportunity for (Re)Insurers in 2016, According to Annual Guy Carpenter Survey: New products represent the biggest growth opportunity for (re)insurers in the year ahead, according to a survey released by Guy Carpenter. The fourth annual survey polled insurance and reinsurance executives at the 2015 Property Casualty Insurers Association of America (PCIAA) Annual Meeting, held in Hollywood, Florida. Designed to identify what (re)insurance professionals believe to be the leading opportunities and threats to growth, this year’s survey examines which areas are most in need of innovation as well as the emerging risks respondents believe will impact their plans for growth in 2016.

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4. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

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5. Guy Carpenter Report Evaluates (Re)Insurance Regulatory Advancement in the Asia Pacific Region: Guy Carpenter published an assessment of the development of solvency requirements and regulatory initiatives that are impacting (re)insurers in the Asia Pacific (APAC) region. According to the report, these developments are driven by four key motivators, including the need to improve resiliency post-catastrophic loss; to increase oversight in a post-Great Recession world; to follow best practices from the banking and international insurance sectors; and finally, to satisfy domestic political pressures.

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6. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

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7. In 2015, Growth and Innovation Demonstrated in Asia Pacific, according to Guy Carpenter Report: Guy Carpenter published a new report finding that prevailing market conditions continued to allow buyers in the Asia Pacific region to achieve favorable pricing, terms and conditions as capacity exceeded demand.

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8. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

Read the article>>

 

9. Guy Carpenter Examines Shifting Public Sector Risk Landscape: Guy Carpenter announced the release of its Public Sector Risk Report, Partnerships: The Way to Public Sector Risk Financing, which examines the shifting economic and risk landscapes that are driving public sector entities to consider new approaches to risk financing.

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10. Solvency II: Assessing Counterparty Default Risk: Counterparty default risk is one of the core components of the SCR. This module has undergone substantial change over the several quantitative impact studies, as the supervisors attempted to find an appropriate measure of the risk. In the QIS 5 final report, EIOPA noted that this module received the most criticism for the “overly complex approach” relative to the materiality of counterparty default risk within the overall risk-based capital requirement. We expect to see additional changes that will simplify the calculation of risk.

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November 2nd, 2015

GC Capital Ideas Top Stories: October, 2015

Posted at 1:00 AM ET

1. Fifth Annual Insurance Risk Benchmarks Report from Guy Carpenter: Guy Carpenter & Company announced the release of the 2015 Insurance Risk Benchmarks Report titled, Risk and Opportunity In the year of ORSA: Annual Statistical Review. The report is produced annually through Guy Carpenter’s ongoing Insurance Risk Benchmarks research project, which focuses robust analytics on risk and performance in the U.S. property/casualty (P&C) insurance industry.

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2. Regulatory Challenges and Opportunities for (Re)insurers: (Re)insurers are being challenged as the regulatory environment becomes more complex, with regulation increasing considerably at multiple levels in numerous jurisdictions throughout the world. Insurers are facing new costs and pressures in their efforts to manage the regulatory landscape.

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3. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

Read the article>>

 

4. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

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5. Reinsurance Mergers and Acquisitions Deja-vu, Buyers Beware: Since 2014, there have been four mergers and acquisitions (M&As) within the reinsurance space that are pure consolidations rather than transactions by an acquirer from outside the sector. To date, we estimate that this consolidation wave has affected some USD 11 billion of net premium income and 5 percent of the global reinsurance market. However, that is short of the USD 16 billion and 13 percent, respectively, for the mid-1990s. There is nothing unusual about M&A. It is a cyclical phenomenon and very much in tune with the broader financial market environment.

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6. Guy Carpenter Examines Shifting Public Sector Risk Landscape: Guy Carpenter announced the release of its Public Sector Risk Report, Partnerships: The Way to Public Sector Risk Financing, which examines the shifting economic and risk landscapes that are driving public sector entities to consider new approaches to risk financing.

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7. Cyber Risk: Cyber risk is one of the most pressing and public topics that industry is grappling with and is being addressed as a strategic priority in corporate boardrooms and by governments around the world. As the global economy becomes increasingly dependent on e-commerce and cloud computing, the susceptibility to cyber risk increases exponentially.

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8. A Clearer View of Emerging Risks: Executive Summary: Technological progress is accelerating at a rapid pace and with it are the risks and opportunities that accompany those changes in many different segments of our economy.

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9. Businesses and Their Exposures: As referenced in the table Taxonomy of Cyber Risk for Corporations below, the potential losses deriving from cyber-attacks or non-malicious information technology failures fall into 11 categories illustrated in the second table Loss Categories Deriving From Cyber Attacks and Non-Malicious IT Failures.

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10. Baden-Baden Reinsurance Symposium Turns Spotlight on Recent Market Consolidation: Guy Carpenter & Company once again hosted the Reinsurance Symposium in Baden-Baden on October 18. Focusing on the theme of “Consolidation: Who Wins in the Race for Scale?”, leading industry figures shared their views on the recent merger & acquisition activity in the insurance and reinsurance arena, commenting on its impact on market dynamics, the key drivers for consolidation and what factors will contribute to success in the push for scale.

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October 1st, 2015

GC Capital Ideas Top Stories: September, 2015

Posted at 1:00 AM ET

1. Port of Tianjin Explosions Set to Become One of Asia’s Largest Insured Man-Made Loss Events: Potential Losses Between USD 1.6 Billion to USD 3.3 Billion: Guy Carpenter released a report on the Port of Tianjin Explosions. The report provides initial loss estimates and outlines the many variables involved in assessing the losses emanating from the two massive initial explosions that occurred at Tianjin Port on August 12 of this year.

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2. Guy Carpenter Examines Emerging Risks Impacting the (Re)insurance Industry: Guy Carpenter published a new report, A Clearer View of Emerging Risks, which examines four key areas where risks continue to emerge or are largely unknown.

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3. The Proliferation of Mergers & Acquisitions in Specialty Markets: New capital inflows, excess capacity and few catastrophe losses have contributed to falling reinsurance prices and a challenging environment for specialty insurers and reinsurers. These factors have driven predictions of a forthcoming wave of market consolidation, which appeared to become a reality in late 2014 and 2015 when a series of rumors and announcements related to a number of large (re)insurers grabbed headlines.

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4. Solvency II Horizon: Challenges and Strategic Impact: After a long period of discussion and many delays, the new European insurance regulatory regime, Solvency II, will commence in January 2016. The rules will be compulsory for all insurance and reinsurance companies and groups in the European Economic Area. The Solvency II rules were developed over a period of more than 15 years, and there are many reasons for the long delay. Two notable reasons are differing business models from country to country and pressure on long-term guarantee products in the private pension system created by the low interest rate environment.

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5. Dedicated Reinsurance Capital Estimate at July 1, 2015: Guy Carpenter’s estimate of dedicated reinsurance sector capital as of July 1, 2015 was again produced through our work with A.M. Best. Our estimate is not a simple aggregation of the capital of all companies that write reinsurance since some capital is allocated to the insurance business or other outside interests. In fact, we have seen increased evidence that some companies are shifting capital toward insurance lines and away from reinsurance lines based on the current rate environment. A.M. Best and Guy Carpenter have estimated the amount of capital dedicated to writing reinsurance by reviewing A.M. Best’s proprietary capital model (BCAR) results as well as line of business allocations. Our current estimate of total capital dedicated to reinsurance is approximately USD 400 billion of which the convergence capital, including catastrophe bonds, industry loss warranties (ILWs), collateralized reinsurance and sidecars is USD 66 billion.

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6. Guy Carpenter Assesses Implications of Current Market Dynamics on Pricing Environment: Challenging market conditions due to abundant capacity, the ongoing influx of new capital and limited loss experience, continue to put pressure on the reinsurance sector, while recent M&A activity is adding a new dynamic to the mix. This is according to the panel of speakers at the eighth annual press briefing held at the Reinsurance Rendez-Vous 2015 in Monte Carlo, by Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies.

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7. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

Read the article>>

 

8. Emerging Risks: Modeling Considerations Moving Forward: Technological progress is accelerating at a rapid pace and with it are the risks and opportunities that accompany those changes in many different segments of our economy.

Read the article>>

 

9. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

Read the article>>

 

10. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

Read the article>>

 

Click here to register to receive e-mail updates >>

 

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.

September 1st, 2015

GC Capital Ideas Top Stories: August, 2015

Posted at 1:00 AM ET

1. Tropical Depression Soudelor: Typhoon Soudelor made landfall in Hualien County, Taiwan at about 05:00 CST Saturday (21:00 UTC Friday), with one-minute sustained winds of 120 mph (195 kilometers per hour) according to the Joint Typhoon Warning Center (JTWC). Soudelor brought excessive rainfall and strong winds to Taiwan, causing inland flooding, mudslides and reports of widespread damage.

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2. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

Read the article>>

 

3. Guy Carpenter Mid-Year Review Assesses Key Industry Trends: Guy Carpenter released its 2015 Mid-Year Report on the (re)insurance landscape. In addition to providing a brief recap of renewal activity highlighted in their release on July 9, the report assesses key industry trends, including a detailed assessment of mergers and acquisitions activity and highlights other notable themes such as cyber security risk, increased regulation and public-private partnerships.

Read the article>>

 

4. Guy Carpenter’s 9th Specialty Insurance Program Issuing Carrier Survey: Guy Carpenter continues to provide the industry with our survey analysis of the current program marketplace from the program issuing carriers’ perspective.

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5. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

Read the article>>

 

6. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin and Zurich Insurance Group

Read the article>>

 

7. Chart: Regional Property Catastrophe ROL Index, 1990 to 2015: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

Read the article>>

 

8. Managing Catastrophe Model Uncertainty, Issues and Challenges: Here we repeat our popular series authored by John Major, which focuses on the issues and challenges in managing catastrophe model uncertainty.

Read the article>>

 

9. June 1, 2015 Renewals Show Rate of Price Declines Moderating: Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), reports that after two years of  price decreases averaging 15 percent on U.S. property catastrophe placements, risk-adjusted pricing moderated at the most recent June renewals.

Read the article>>

 

10. July 1 Renewals Reveal Price Declines Moderating Especially for US Wind-Exposed Programs: Guy Carpenter released its July 1 Renewal Briefing  that shows price declines have continued to moderate, predominantly on programs covering US wind. Overall pricing was down again at the July renewal across virtually all geographies and lines of business. However, additional limit placed over the past few months is partially responsible for the stabilization of price declines, particularly for US property. Increased demand for reinsurance and expansion of tailored coverage persisted through the July renewal period from previous seasons.

Read the article>>

 

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August 3rd, 2015

GC Capital Ideas Top Stories: July, 2015

Posted at 1:00 AM ET

1. Guy Carpenter Mid-Year Review Assesses Key Industry Trends: Guy Carpenter released its 2015 Mid-Year Report on the (re)insurance landscape. In addition to providing a brief recap of renewal activity highlighted in their release on July 9, the report assesses key industry trends, including a detailed assessment of mergers and acquisitions activity and highlights other notable themes such as cyber security risk, increased regulation and public-private partnerships.

Read the article>> 

 

2. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

Read the article>> 

 

3. July 1 Renewals Reveal Price Declines Moderating Especially for US Wind-Exposed Programs: Guy Carpenter released its July 1 Renewal Briefing  that shows price declines have continued to moderate, predominantly on programs covering US wind. Overall pricing was down again at the July renewal across virtually all geographies and lines of business. However, additional limit placed over the past few months is partially responsible for the stabilization of price declines, particularly for US property. Increased demand for reinsurance and expansion of tailored coverage persisted through the July renewal period from previous seasons.

Read the article>>

 

4. Cyber-attacks: Mounting Concerns: Here we review recent GC Capital Ideas stories on mounting concerns over cyber-attacks.

Read the article>> 

 

5. Guy Carpenter Names Tim Gardner CEO of U.S. Operations: Guy Carpenter announced the appointment of Tim Gardner as CEO of U.S. Operations effective August 1, 2015. Mr. Gardner will be a member of the Guy Carpenter Board of Managers and he will be based in New York.

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6. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

Read the article>> 

 

7. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

Read the article>> 

 

8. Specialty Insurance Programs Poised for Growth and Opportunity in 2015, According to Guy Carpenter Survey: Guy Carpenter released the findings of its ninth Specialty Insurance Program Issuing Carrier Survey. The survey, which analyzes trends and benchmarks across the Program Administrator and Managing General Agency (PA/MGA) market, asserts that the PA/MGA market continues to thrive, with a positive outlook and growth opportunities expected for the year ahead.

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9. 2015 Atlantic Hurricane Season: Tropical Storms Ana And Bill Rush In On Expected Quiet Season: As with any season, a landfalling hurricane can be a serious threat regardless of seasonal outlooks for the Atlantic Basin at large.

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10. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, Q1 2015: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for the first quarter, 2015 compared to first quarter, 2014.

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July 1st, 2015

GC Capital Ideas Top Stories: June, 2015

Posted at 1:00 AM ET

1. June 1, 2015 Renewals Show Rate of Price Declines Moderating: Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), reports that after two years of  price decreases averaging 15 percent on U.S. property catastrophe placements, risk-adjusted pricing moderated at the most recent June renewals.

Read the article>>

 

2. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

Read the article>>

 

3. Guy Carpenter Launches CAT Risk Studio to Enhance Catastrophe Risk Analysis Capabilities: Guy Carpenter launched CAT Risk Studio (CRS), a new division that will support Guy Carpenter’s Model Suitability Analysis (MSA)® initiative and will work closely with GC Securities* on the development of parametric products for catastrophe risk transfer. CRS establishes Guy Carpenter’s presence at the Marsh & McLennan Innovation Centre in Dublin, Ireland.

Read the article>>

 

4. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.

Read the article>>

 

5. Chart: Significant Insured Losses - 2011 to YE 2014: Reports losses by quarter.

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6. Evolving Role of Reinsurance in Public Sector Risk: Here we review the evolving role of reinsurance in mitigating public sector risk through the expanding deployment of reinsurance and capital market solutions.

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7. Guy Carpenter Launches the Financial Institutions and Cyber Components of the GC ForCas℠ Casualty Catastrophe Modeling Platform: Guy Carpenter announced the launch of the Financial Institutions and Cyber components of the GC ForCas℠ casualty catastrophe modeling platform. GC ForCas is a stochastic modeling platform developed to help insurance carriers better understand their exposure to casualty catastrophe losses resulting from the accumulation of U.S. Commercial Lines insurance policies.  

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8. Cyber-attacks: Mounting Concerns: Here we review recent GC Capital Ideas stories on mounting concerns over cyber-attacks.

Read the article>>

 

9. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

Read the article>>

 

10. Cat Bond Update: Q1 2015 - Issuance Reaches Historic Volume: GC Securities’* briefing, “Catastrophe Bond Update: First Quarter 2015″ is now available.

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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.

June 1st, 2015

GC Capital Ideas Top Stories: May, 2015

Posted at 1:00 AM ET

1. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

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2. Impact of Insurance Market Cycles on Insurers’ Reserves: Here we review GC Capital Ideas stories on the impact of insurance market cycles on insurers’ reserves.

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3. Reinsurance Versus Subordinate Debt: Which is Best for Solvency Capital?: Here we review how a holistic approach to managing solvency capital requirements can benefit insurers’ bottom line.

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4. Emerging Risk Challenges And Opportunities: A cursory reading of just a few of the publications on the topic of emerging risks quickly resembles a crash-course in risk aversion therapy. We have been subjected to a bewildering and ever lengthening series of lists of emerging risks. Swiss Re recently identified 26 such risks, Hannover Re has an ongoing list of 14 while the World Economic Forum in its Global Risks 2014 lists 31 global risks.

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5. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

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6. 7.8Mw Earthquake - Lamjung, Nepal: Nepal experienced a magnitude 7.8 earthquake on April 25, followed by two major aftershocks on April 25 and 26 of magnitude 6.6 and 6.7, respectively, according to the U.S. Geological Survey (USGS). Media reports indicate at least 5,582 fatalities, 11,200 injuries, and at least eight million people affected. Infrastructure and transportation routes have been severely disrupted and food and water shortages are of great concern. The USGS PAGER service estimates most probable economic losses between USD1 and USD10 billion. It is clear from media reports that impacts have been widespread and of excessive severity and our first thoughts and concerns are with the millions affected by this tragic event.

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7. New Solutions Help Mutual Insurers Face Market Challenges: Mutual insurance companies of all sizes currently face challenging market conditions where success requires not only focused distribution and operational excellence, but also access to increasingly sophisticated analytics services and products. How these firms use their resources and advanced technology to respond to these issues will separate market outperformers from underperformers.

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8. Guy Carpenter Appoints Former New York State Superintendent of Insurance James Wrynn as Vice Chairman of US Strategic Advisory: Guy Carpenter announced the appointment of former New York State Superintendent of Insurance James J. Wrynn as Vice Chairman of US Strategic Advisory and a Managing Director.

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9. Approach of Atlantic Hurricane Season: As we approach the beginning of the 2015 Atlantic Hurricane Season, we review CAT-i stories covering the major storms from 2014.

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10. Chart: Combined Ratio For Guy Carpenter Composite, YE 2014: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through year end 2014.

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May 4th, 2015

GC Capital Ideas Top Stories: April, 2015

Posted at 1:00 AM ET

1. Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

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2. Reinsurance Versus Subordinate Debt: Which Is Best for Solvency Capital?: In recent months a number of market commentators have opined on the merits of proportional reinsurance versus subordinated debt (sub debt), some favoring reinsurance solutions and some favoring sub debt, but generally finding results in line with the products their companies offered. Guy Carpenter feels reinsurance or sub debt alone is unlikely to provide the best solution to meet solvency capital requirements. Instead, a blended approach should be considered.

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3. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

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4. Guy Carpenter Launches New Public Sector Specialty Practice: Guy Carpenter announced the launch of the Public Sector Specialty Practice. This global team is focused exclusively on the unique risk management needs of governmental agencies and entities.

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5. Chart: Return On Equity For Guy Carpenter Reinsurance Composite, YE 2014: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2004 through year end 2014.

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6. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, YE 2014: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for the year end, 2014 compared to year end, 2013.

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7. January 1, 2015 Renewals See Lower Pricing and Broader Coverage for Clients: 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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8. Chart: Regional Property Catastrophe ROL Index, 1990 to 2015: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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9. Chart: Combined Ratio For Guy Carpenter Composite, YE 2014: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through year end 2014.

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10. Evolving Role of Reinsurance in Public Sector Risk: Here we review the evolving role of reinsurance in mitigating public sector risk through the expanding deployment of reinsurance and capital market solutions.

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