Posts Tagged ‘Month in Review’



June 3rd, 2019

GC Capital Ideas Top Stories: May, 2019

Posted at 1:00 AM ET

1. Chart: Combined Ratio For Guy Carpenter Reinsurance Composite, Year-End 2018: Chart presents combined ratio of the Guy Carpenter Global Reinsurance Composite, 2005 through year-end 2018.

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2. A Risk Overview Of Wildfire: Today, the frequency and severity of wildfires are garnering greater attention - not only from the media, but also from (re)insurers, catastrophe modelers, mitigation experts and other invested parties.

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3. A Dynamic Approach To Managing Life Reinsurance Arrangements: The traditional life reinsurance model typically involves perpetual treaties linked to an underlying product. In order to create alignment between the contracting parties, the treaty would follow the underlying terms of the product. However, the treaty structure may concurrently include provisions that reduce alignment between the insurer and reinsurer, to the insurer’s detriment. This approach is often wrapped in the reinsurer’s “value proposition” - providing services to support the pricing, underwriting and claims management of the underlying product.

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4. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, Year-End 2018: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite, comparing year-end 2017 with year-end 2018.

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5. Finding The Elusive Cyber Loss Curve Can Pay Big Dividends For Financial Institutions: What is the likelihood that your organization will experience a material cyber event in the next 12 months? Is the risk greater than 50 percent? Less than 25 percent? These questions are ever-present on the minds of risk managers, who long for at least a practical - if not precise - answer.

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6. What Is The Future Of Alternatives To Traditional Insurance Markets? There’s been much discussion in risk finance circles over the past decade about alternatives to traditional insurance markets. Much of the focus has been on the provider side - the pension funds, sovereign wealth funds and other investors that provide the capital behind so-called alternative risk transfer (ART) solutions.

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7. Understanding Flood Risk In Malaysia Through Catastrophe Modeling: According to Malaysia’s Department of Irrigation and Drainage, the many rivers running through the country put about 9 percent of the total land area under flood risk, potentially affecting 2.7 million people. Rapid urbanization is only going to worsen the problem through rising population concentrations and at-risk infrastructure, land consumption and the channeling of water courses.

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8. Flood Risk Challenges In Asia: Flood is one of the most significant natural catastrophe perils, globally accounting for nearly 40 percent of all catastrophe events. In 2017, floods accounted for nearly half of the natural catastrophe events and 65 percent of natural catastrophe deaths in the world - two thirds of the deaths occurring in Asia.

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9. Affirmative Versus Silent Cyber: An Overview: While the current debate over “affirmative” versus  “non-affirmative” coverage has been ongoing for a few years, WannaCry and Petya/NotPetya cyberattacks helped make the issue of “silent cyber” more critical. These two 2017 cyberattacks effectively shifted the conversation from data breach, notification costs and third-party liability to first-party liability insuring agreements due to the extent and expanse of the systematic, large-scale damages they triggered.

Read the article >>


10. Methodological Considerations In The Statistical Modeling Of Catastrophe Bond Prices: John Major has authored an article that aims to help actuaries, financial analysts, statisticians, data scientists and their clients better investigate how property catastrophe risk, and particularly catastrophe bonds, are  priced.

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May 1st, 2019

GC Capital Ideas Top Stories: April, 2019

Posted at 1:00 AM ET

1. Are You at Risk? Managing Affirmative and Silent Cyber Risk Accumulation: The script of the global cyber insurance market is still mainly being written in the United States. Approximately 85 percent of global cyber insurance premiums of between USD 2.5 and 3.5 billion are generated in the United States. The take-up rate for this line of business in Asia is still relatively low, but the Japan market has been experiencing steady growth in the last 24 months.

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2. Insurance Risk Management 2025: Navigating the Digital Future: How could the insurance industry look in 2025, and what are the implications for the Risk function? A video from Guy Carpenter affiliate Oliver Wyman offers a futuristic glimpse of a rapidly evolving industry.

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3. Facultative or Treaty and Why the Need for Hybrid Solutions: Insurers face challenges in managing underwriting, capital protection, risk and risk profiling as they navigate underwriting guidelines based on their gross and net risk underwriting appetite. Against these challenges, companies utilize various forms of reinsurance, traditionally facultative or treaty, to buy risk protection, shore up capital and satisfy rating agencies.

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4. NotPetya Was Not Cyber “War”: NotPetya wreaked havoc for some large companies, costing them billions of dollars in lost revenue, damaging computer systems, and requiring significant expense to restore global operations. In its wake, entire industries reassessed their practices for patching, business continuity, supply chain interruption, and more.

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5. A Matter of Time: Why the Clock is Ticking on Stop-Loss Reinsurance: As cutting-edge science leads to new, high-cost drugs and therapies, insurers are seeing uncapped claims costs grow higher. Stop-loss reimbursements generally are on the rise, with an increasing number of employers being reimbursed for a stop-loss claim every year.

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6. Chart: Evolution of the Sidecar Market: Chart presents the evolution of sidecar capacity compared with the Global Property Catastrophe ROL Index, 2005 - 2018.

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7. When the Going Gets Tough, the Tough Get Going: Overcoming the Cyber Risk Appetite Challenge: The scale of recent attacks and resulting media attention, supervisory pressures to upgrade cyber risk management and the pace of technology innovation to keep up with are increasing rapidly. These factors are compelling financial institutions to have a clear understanding of the cyber risks they face, and to determine the level of cyber risk the institution is willing to accept.

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8. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2019.

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9. Investing in a Time of Climate Change - The Sequel: A new report documents Mercer’s latest climate scenario model for assessing the effects of both climate-related physical damages (physical risks) and the transition to a low-carbon economy (transition risks) on investment return expectations. The Sequel models three climate change scenarios, a 2°C, 3°C and 4°C average warming increase on preindustrial levels, over three timeframes - 2030, 2050 and 2100.

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10. Asia’s Health Care Industry Reels from Cyberattacks: Health care is one of the sectors most vulnerable to cyberattacks, with more than one in four (27 percent) health care organizations reporting that they have been a victim of a cyberattack in the past 12 months. This is more than financial institutions (20 percent) and nearly twice the incidence in the communications, media and technology sector (14 percent). Despite this, respondents from the health care industry underestimate the likelihood of a cyberattack.

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April 1st, 2019

GC Capital Ideas Top Stories: March 2019

Posted at 1:00 AM ET

1. Chart: Evolution Of The Sidecar Market: Chart presents the evolution of sidecar capacity compared with the Global Property Catastrophe ROL Index, 2005 - 2018.

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2. Building For Resilience: How To Avoid A Catastrophe Model Failure: Since commercial catastrophe (CAT) models were first introduced in the 1980s, they have evolved as new scientific discoveries and claims insights emerged. Despite the sophisticated nature of each new generation of CAT models, occasionally a model misses a significant loss driver for a particular peril.

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3. GC Capital Ideas Covers Modeling Developments: GC Capital Ideas presents a review of our recent stories covering modeling for various perils.

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4. Global Cyber Terrorism Incidents On The Rise: The nature of the terrorism threat facing society has changed considerably in the last 20 years. Previously, governments and (re)insurers structured their mitigation strategies and responses to deal with attacks that were large in scale.

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5. A Risk Overview Of Wildfire: Today, the frequency and severity of wildfires are garnering greater attention-not only from the media, but also from (re)insurers, catastrophe modelers, mitigation experts and other invested parties.

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6. Chart: Global Composite Return On Average Equity, 2005-YE 2018: Chart reports Return on Average Equity for the Guy Carpenter Global Composite compared against the five-year weighted average.

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7. Climate Change Has Claimed Its Biggest Corporate Victim; Now Banks Are On Alert: When PG&E filed for Chapter 11 protection in January, The Wall Street Journal dubbed it the “first climate change bankruptcy.” The California power utility was facing USD 30 billion in potential liabilities following a series of devastating wildfires linked to its equipment-wildfires made more likely by a prolonged period of hot, dry weather that had reduced the surrounding forests to tinder and which scientists have since attributed to climate change.

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8. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2019

View the chart >>


9. Affirmative Versus Silent Cyber: An Overview: While the current debate over “affirmative” versus “non-affirmative” coverage has been ongoing for a few years, WannaCry and Petya/NotPetya cyberattacks helped make the issue of “silent cyber” more critical. These two 2017 cyberattacks effectively shifted the conversation from data breach, notification costs and third-party liability to first-party liability insuring agreements due to the extent and expanse of the systematic, large-scale damages they triggered.

Read the article >>


10. Identifying And Responding To A Dysfunctional Culture: Loss of clients, mass employee walk-outs, shareholder lawsuits, stock price drops, hundreds of CEOs and executives turnovers, and countless daily instances of organizational inefficiencies - these are just some of the recent impacts of cultural dysfunction.

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March 4th, 2019

GC Capital Ideas Top Stories: February 2019

Posted at 1:00 AM ET

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for the years 1990 through 2019.

View the chart >>


2. Building for Resilience: How to Avoid a Catastrophe Model Failure: Since commercial catastrophe (CAT) models were first introduced in the 1980s, they have evolved as new scientific discoveries and claims insights emerged. Despite the sophisticated nature of each new generation of CAT models, occasionally a model misses a significant loss driver for a particular peril.

Read the article >>


3.Automobile Liability Segment Outlook: In 2017, writers of automobile (auto) liability insurance continued to cope with deteriorating combined ratios, which remained above 100 percent for the seventh consecutive year. While carriers have implemented effective strategies that improved their operations and as a result are achieving improved expense ratios, evolving market and environment factors continue to challenge auto insurers.

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4.Sidecars: Capitalizing on Market Cycles to Improve Client Solutions: Following U.S. hurricanes Katrina, Rita and Wilma in 2005 and the ensuing “hard” property catastrophe reinsurance market, reinsurers and investors increasingly started turning to sidecar insurance-linked securities to access new and replacement capacity.

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5. Cybersecurity, Strategic and Financial Risks to Dominate Risk Landscape: According to nearly 400 treasury professionals surveyed, strategic and financial risks, along with cybersecurity, will dominate the risk landscape for the next 18-36 months.

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6. Reinsurance Rate Movement Limited at January 1 Despite Uncertainty over Pricing Adequacy and Available Capital: The overall impact of catastrophe losses on property rates was muted at the January 1, 2019 reinsurance renewals, but the fourth highest annual catastrophe loss year on record did create questions over pricing adequacy, underwriting strategy and the amount of capital available, says Guy Carpenter.

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7. Affirmative versus Silent Cyber: An Overview: While the current debate over “affirmative” versus  “non-affirmative” coverage has been ongoing for a few years, WannaCry and Petya/NotPetya cyberattacks helped make the issue of “silent cyber” more critical.

Read the article >>


8. Risk Financing Strategies Needed as Exposure to Flood Increases: The affordability of flood resilience will become an increasingly critical issue as rising sea levels and urbanization expose a growing number of people and population centers to floods, says the World Economic Forum’s Global Risk Report 2019.

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9. GC Videocast - 2019 Cyber Landscape: New Regulations, Risks and Management Expectations: Cyber Practices experts at Guy Carpenter’s affiliate, Marsh, held a video webcast to look at how changing cyber risk exposures, regulations and best practices will change the cyber risk management landscape in 2019.

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10. Chart: Top Risks Expected to Increase in 2019: The chart lists the top ten risks expected to deteriorate in 2019 across five areas of concern highlighted in this year’s Global Risks Perception Survey (GRPS).

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February 4th, 2019

GC Capital Ideas Top Stories: January 2019

Posted at 1:00 AM ET

1. Reinsurance Rate Movement Limited at January 1 Despite Uncertainty over Pricing Adequacy and Available Capital: The overall impact of catastrophe losses on property rates was muted at the January 1, 2019 reinsurance renewals, but the fourth highest annual catastrophe loss year on record did create questions over pricing adequacy, underwriting strategy and the amount of capital available, says Guy Carpenter.

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2. Chart: Top Risks Expected to Increase in 2019: The chart lists the top ten risks expected to deteriorate in 2019 across five areas of concern highlighted in this year’s Global Risks Perception Survey (GRPS). The results of GRPS are analyzed in the 14th edition of the Global Risks Report, prepared by the World Economic Forum with the support of Guy Carpenter’s parent company, Marsh & McLennan Companies. The chart shows the percentage of respondents who are concerned about each risk.

View the chart >>

3. Cost of Capital and its Use in Valuing Reinsurance: Increasingly, reinsurance is seen as an important element of capital management. Reinsurance decisions are moving away from the reinsurance buyer and towards the finance teams. These teams need to find a way of comparing reinsurance in a straightforward way. Defining the cost of capital for reinsurance means that it can be compared with other capital sources.

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4. Sydney Hailstorms, December 20, 2018: A severe convective storm affected large parts of New South Wales, including Sydney, the Central Coast and Wollongong from 4:00 to 7:00 pm on December 20, 2018. The storm generated large hail, damaging winds and flash flooding in many areas of the state. According to the Australian Bureau of Meteorology (BOM), there were ground reports of hail of 8 cm diameter in Berowra Heights in Sydney’s north and similar size hail in Casula and Liverpool in the city’s southwest.

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5. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2019.

View the Chart >>

6. Guy Carpenter Announces New Division and Senior Appointments Designed to Deliver Enhanced Client Value: Guy Carpenter today announced the formation of a new Global Capital Solutions Group and a series of new leadership appointments related to the Jardine Lloyd Thompson Group plc (JLT) acquisition. These appointments will become effective upon closing of the transaction between Guy Carpenter’s parent company, Marsh & McLennan Companies, and JLT, which remains subject to the receipt of certain antitrust and financial regulatory approvals.

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7. Excess and Surplus (E&S) Segment Outlook: The excess and surplus (E&S) lines segment of the insurance industry is an essential market for risks for which typically the standard insurance market does not offer coverage. The E&S market as a whole remained somewhat consistent and disciplined with its pricing and risk selection, with the first half of 2017 being very similar to 2016. Both primary and excess casualty rates were flat to up 5 to 10 percent depending on the line of business (LOB) and class. Specific areas, such as New York Construction and Transportation experienced double digit rate increases. Professional lines rates were overall flat.

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8. Balance Sheet Expansion: Opportunities and Challenges: From 2014 to 2017, the property and casualty (P&C) industry in the United States grew its collective capital position from USD 686 billion to USD 767 billion, a 3.8 percent compound annual growth rate. This expansion in capital was achieved during a period when the normalized return profile of the P&C underwriting business was considered to be below the cost of capital. The growth of industry capital during this period of subpar underwriting returns provides insights into the expectations for carriers’ opportunities and challenges through 2018 and into the years ahead.

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9. Top Financial and Professional Lines Risks in 2019: The U.S. market for financial and professional insurance coverage saw a number of challenges in 2018, including new privacy regulations, an increase in workplace sexual harassment claims as the #MeToo movement continued to gain traction, and more securities litigation activity, says a report by Guy Carpenter’s sister company, Marsh.

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10. Taiwan: Catastrophe Insurance and Gap in Coverage: Taiwan has experienced a series of extreme weather events in recent years, which are expected to continue into the future, says the report 14 Shades of Risk In Asia-Pacific: Evolving Risk Concerns in Asia-Pacific by Marsh & McLennan Companies’ Asia-Pacific Risk Center.

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January 2nd, 2019

GC Capital Ideas Top Stories: December 2018

Posted at 1:00 AM ET

1. Cost of Capital and its Use in Valuing Reinsurance: Increasingly, reinsurance is seen as an important element of capital management. Reinsurance decisions are moving away from the reinsurance buyer and towards the finance teams. These teams need to find a way of comparing reinsurance in a straightforward way. Defining the cost of capital for reinsurance means that it can be compared with other capital sources.

Read the article >>

2. Wildfire Activity - California - Update: Recent wildfire activity has rendered especially severe impacts to areas of California, including areas of Butte, Los Angeles and Ventura Counties. Rates of extreme fire spread were enabled by especially dry, windy conditions on November 8 and the days following. Aggressive firefighting efforts allowed containment efforts to progress despite adverse conditions over the following week. Periods of heavy rainfall have recently allowed firefighting crews to bring the last of the fires to 100 percent containment over the last week. The Camp, Woolsey and Hill Fires have burned an estimated 20,297 structures since November 8, including at least 13,972 residential structures from the Camp Fire alone, according to Cal Fire statistics. These fires have also claimed at least 91 lives.

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3. Mw 7.0 Earthquake – Near Anchorage, Alaska: A magnitude (Mw) 7.0 earthquake was reported near Anchorage, Alaska around 17:29 UTC on November 30 (8:29 local time), according to the U.S. Geological Survey (USGS). The epicenter was located at a depth of 44.1 km and about 12.9 km (8.0 miles) north of Anchorage, Alaska. A tsunami warning was issued but later lifted by the U.S. National Weather Service. Initial media reports indicate that the event rendered considerable damage to infrastructure including roads, power and water, along with significant transportation disruption. Damage has been reported to buildings including interior damage and some cracked foundations with some building collapses. Initial media reports indicate no fatalities or injuries, although survey efforts are still ongoing.

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4. Asia Pacific Reinsurance Market: Abundant Capacity and Flat Pricing: For buyers of catastrophe reinsurance in the Asia Pacific region, pricing has remained largely flat during 2018. The region has experienced losses during the year to date, and at the time of writing, it is expected that a proportion of these will impact reinsurers. At the same time, market capacity remains abundant and underlying reinsurance market conditions are favorable for buyers, as reported by Guy Carpenter in its 2018 Asia Pacific Catastrophe Reinsurance Executive Summary. The effect of the 2018 losses on market sentiment going forward is not fully understood.

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5. Global Insurance Prices Rise for Fourth Consecutive Quarter: Trends in property and financial and professional lines of coverage drove average commercial insurance prices higher for the fourth consecutive quarter, according to the most recent Marsh Global Insurance Market Index. Global commercial insurance prices tracked in the index rose, on average, more than one percentage point in the third quarter of 2018.

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6. Ensuring innovation is more than a cliché: The numerous challenges the insurance industry faces mean that innovation is critical to tackling them. Rob Bentley, Chief Executive Officer of Guy Carpenter’s Global Strategic Advisory, describes how Guy Carpenter is helping its clients manage these challenges-especially the conundrum of InsurTech, in an interview that appeared in Intelligent Insurer magazine.

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7. Cyberattacks Emerge as Leading Risk in East Asia and the Pacific: Cyberattacks are the leading risk to doing business across East Asia and the Pacific, according to the recent World Economic Forum (WEF) report Regional Risks for Doing Business 2018.

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8. Europe Experienced Increased Cyberattacks in the First Half of 2018: Estimates suggest that the number of cyberattacks across Europe increased by around a third in the first quarter of 2018, compared to the same period last year, according to the recent World Economic Forum (WEF) report Regional Risks for Doing Business 2018.

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9. 14 Shades of Risks: Navigating the Risk Landscape in Asia-Pacific: The Asia-Pacific region (APAC) has become the world’s primary driver of global economic growth. While often referred to as one economic bloc, the Asia-Pacific region is home to countries and territories that are vastly different from each other in terms of demographics, economic development stages, political institutions and cultures. This regional heterogeneity translates to a diversified set of risk concerns in different countries and territories.

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10. Here’s How to Bring Agility into the Boardroom: Today’s corporate world is being shaped by a near constant onslaught of unpredictable events. In such turbulent times the traditional corporate governance model risks becoming outdated and ineffective.

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December 3rd, 2018

GC Capital Ideas Top Stories: November 2018

Posted at 1:00 AM ET

1. A Math Formula May Offer a Solution to Insurers’ Critical Challenges: Guy Carpenter has developed a methodology that applies a mathematical formula to provide insurers and reinsurers with a unified, practical framework for risk pricing and capital allocation.

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2. Affirmative versus Silent Cyber: An Overview: While the current debate over “affirmative” versus “non-affirmative” coverage has been ongoing for a few years, WannaCry and Petya/NotPetya cyberattacks helped make the issue of ”silent cyber” more critical. These two 2017 cyberattacks effectively shifted the conversation from data breach, notification costs and third-party liability to first-party liability insuring agreements due to the extent and expanse of the systematic, large-scale damages they triggered.

Read the article >>


3. Regional Risks for Doing Business: The recent World Economic Forum’s 2018 Executive Opinion Survey provides a snapshot of the global risks that executives say are of highest concern for doing business in their respective countries.

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4. GC Videocast - Emerging Cyber Risks Explained: The “years of data breaches,” 2013 and 2014, evolved to healthcare breaches, followed by ransomware attacks. What cyber perils lie ahead? Guy Carpenter’s Jeremy S. Platt, Managing Director and Cyber Solutions Specialty Practice Leader; and Chris Shafer, Assistant Vice President at Cyber Solutions Specialty Practice, explain in the video.

Click here to watch the video >>


5. Increasing Frequency of Extreme Weather Events in Asia Pacific: The Asia Pacific may be the most adversely impacted region by the pronounced increase in the frequency of extreme weather events around the world. The Guy Carpenter Asia-Pacific Catastrophe Report 2017 projects an increase in economic losses from natural disasters in Asia, which amounted to USD 126 million a day between 2006 to 2015.

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6. Evolving Terror Threats - Innovation Needed to Meet Changing Demands: New modes of attack are causing a shift from large terrorist events aimed at property destruction to less sophisticated attacks causing mass casualties and fear. With global commerce, tourism and financial markets impacted, demand is growing for modeling, capacity and protection-gap solutions to increase resiliency against such attacks.

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7. Cyberattacks Top the List of Risks in North America: For business executives in the United States and Canada, cyberattacks are now the number one risk to doing business, according to the recent World Economic Forum (WEF) report Regional Risks for Doing Business 2018.

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8. Terrorism: The Need for Expanded Capacity: Terrorists are increasingly able to modify, adapt and reinvent their tactics and quickly spread their methodologies to their worldwide support base. Economically, the effect of this change across the globe has been significant. Tourism, trade and investments are examples of areas affected as countries grapple with terrorist actions, both direct and indirect. According to the Institute for Economics and Peace, although the peak of global economic impact from terror events was reached in 2014, it remains at historically high levels.

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9. Silent Cyber Explained: “Silent cyber,” also known as unintended or non-affirmative coverage, refers to the unknown or unquantified exposures stemming from cyber perils that may be triggered within traditional property and liability insurance policies. The systemic nature of the cyber risk means silent cyber may become increasingly more prevalent in virtually every type of insurance policy.

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10. Facultative or Treaty and Why the Need for Hybrid Solutions: Insurers face challenges in managing underwriting, capital protection, risk and risk profiling as they navigate underwriting guidelines based on their gross and net risk underwriting appetite. Against these challenges, companies utilize various forms of reinsurance, traditionally facultative or treaty, to buy risk protection, shore up capital and satisfy rating agencies, according to Jeff Fleming, Managing Director, Guy Carpenter.

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November 1st, 2018

GC Capital Ideas Top Stories: October 2018

Posted at 1:00 AM ET

1. Baden-Baden Reinsurance Symposium Explores Market Impact of Global (Re)insurance Composites: Guy Carpenter hosted the Reinsurance Symposium in Baden-Baden on October 21, the 10th year that Guy Carpenter has hosted the event. The theme of the Symposium was “Back to the past: a return to global composites.”

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2. Leading Cyber Insurance Strategies: Insurers are undertaking several initiatives to seize opportunities in writing network security and privacy insurance in order to achieve profitable growth. Read about some of the actions on which they are focusing.

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3. Hurricane Michael: Hurricane Michael made landfall on October 10 as a high-end Category-4 hurricane on the Florida Panhandle, with maximum sustained winds of 155 mph. The storm rendered severe to complete damage to areas from Panama City to Port Saint Joe, with especially severe damage in Mexico Beach due to severe wind and storm surge.

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4. Escalating Threat of Cyber Terrorism: The WannaCry and NotPetya cyber-attacks illustrated the magnitude of the damage that cyber-attacks can cause. These two attacks affected organizations in more than 150 countries, prompted business interruption and other losses estimated at well over USD 300 million by some companies, brought reputational damage and resulted in loss of customer data.

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5. Pushing the Model Boundaries - GC@BB Commentary: As Solvency II-based capital regimes further impact internal capital models, greater clarity around a company’s view of risk is becoming more critical. Yet optimizing model infrastructures is often limited by platform inflexibility, computational power and cumbersome approval processes, according to a European roundtable of Guy Carpenter leaders.

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6. Super Typhoon Trami: In the West-Pacific Basin, Typhoon Trami made landfall in the city of Tanabe, Japan (Wakayama prefecture) on 30 September at around 11 UTC (8 PM local time), according to media reports. Before reaching Honshu, the typhoon had rendered considerable impacts while making close approach to Okinawa, Kyūshū and Shikoku Islands.

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7. A Strategy for Market Volatility: Portfolio Optimization - GC@BB Commentary: Today, (re)insurers are challenged by a host of factors pressuring companies’ earnings and capital – excess capacity is impacting underwriting profitability as claim frequency and severity are rising – contributing to a movement toward balance sheet volatility that impacts earnings and growth, according to a global roundtable of Guy Carpenter leaders.

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8. Marsh & McLennan Cyber Resilience Insights Microsite: As we enter National Cybersecurity Awareness Month, a new resource from Marsh & McLennan Companies collates the best insights on cyber resilience from across the firm and its strategic cyber partnerships.

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9. A New Boldness in Tackling Emerging Risks – Part I: Risk teams are under increasing pressure to move beyond blocking and tackling to providing strategic risk advice that can help their companies achieve sustainable resilience in the face of critical emerging risks, according to the report Material Improbabilities, Getting Practical with Emerging Risks from Marsh & McLennan Companies Global Risk Center.

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10. Cybersecurity Awareness: On the start of the 15th Cybersecurity Awareness Month, GC Capital Ideas has collected our recent articles that offer insights into this very critical risk. Cyber risk and security will remain a top priority for the foreseeable future. In addition to hackers and cyber criminals continuously developing new methods of attack, state-sponsored cyber-attacks have occurred according to the U.S. government.

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October 1st, 2018

GC Capital Ideas Top Stories: September 2018

Posted at 1:00 AM ET

1. Chart: Significant Insured Losses 2011–2Q2018: Chart exhibits the significant insured losses from 2011 through the second quarter of this year.

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2. Chart: The Matrix of Cyber and Property Lines Insurance Coverage: Chart examines the policy coverage matrix between cyber and property lines of insurance coverage.

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3. Guy Carpenter Announces New Global Capability to Help Clients Navigate Evolving InsurTech Market: Guy Carpenter announced the launch of GC Genesis, its expanded InsurTech advisory offering designed to meet clients’ desire to understand and leverage the dynamic universe of InsurTech.

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4. Super Typhoon Jebi: In the West Pacific Basin, Typhoon Jebi made first landfall on Shikoku (Tokushima Prefecture) at around 03 UTC on 4 September, and then second landfall near Kobe (Hyōgo Prefecture) at around 05 UTC on the same day. The storm brought reports of damaging wind gusts in excess of 160 km/hr (100 mph), flooding due to storm surge and heavy rainfall and mudslides.

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5. Guy Carpenter appoints Head of Strategy and Client Engagement: Guy Carpenter announced the appointment of Shaun Sinniah as Head of Strategy and Client Engagement for the firm’s International and Global Specialties divisions, with effect from October.

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6. Mw 6.6 Earthquake – Iburi, Hokkaido: A magnitude (Mw) 6.6 earthquake struck the island of Hokkaido in northern Japan at 18:07 UTC on September 5 (03.07 JST on September 6), according to the U.S. Geological Survey (USGS). The epicenter was located at a depth of 33.4 km in the Iburi Subprefecture, about 20 km east of the coastal city of Tomakomai and 62 km southeast of Sapporo. No tsunami warning was issued.

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7. Managing Catastrophe Model Change: Incorporating new hazard and claims insights can improve the estimates derived from catastrophe models. By re-analyzing historical events using the latest scientific methods or refining claims with more granular geographical and line of business breakdowns, we can update models with the latest expertise and data. But model changes that yield large swings in loss estimates for frequent events must be carefully scrutinized to understand assumptions and processes in order to truly support ownership of risk.

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8. Data and Analytics Support Innovations in Flood Risk Management - GC@MC Commentary: Flood risk and its impact on communities are global concerns. Advances in data quality coupled with expanding model development and computational power leads to increasingly accurate risk evaluation for (re)insurer portfolio analyses and underwriter risk analyses – with a concomitant increase in policyholder risk awareness.

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9. A Strategy for Market Volatility: Portfolio Optimization - GC@MC Commentary: Today, (re)insurers are challenged by a host of factors pressuring companies’ earnings and capital – excess capacity is impacting underwriting profitability as claim frequency and severity are rising – contributing to a movement toward balance sheet volatility that impacts earnings and growth, according to a global roundtable of Guy Carpenter leaders.

Read the article >>

10. Accounting Changes Impacting the Reinsurance Landscape - GC@MC Commentary: The introduction of International Financial Accounting Standard 17 (IFRS 17) adds another level of complexity to the already challenging (re)insurer legislative and regulatory environment. While IFRS 17 creates a number of changes, particular interest should be made to the significant changes it presents to accounting of insurance contracts. IFRS 17 will establish a fair value view of liabilities and together with the fair value view of assets based on IFRS 9, companies’ balance sheets and income statements are likely to encounter a substantially higher degree of volatility, according to a global roundtable of Guy Carpenter leaders.

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