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

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Casualty catastrophe occurrences have become increasingly common over the past decade. The recent 2008 financial catastrophe is the easiest to cite, due to its sheer size and the fact that it continues to unfold even today. But, there have been many others. The collapse of the “dotcom economy” led to scandals around initial public offering laddering and equity analyst conflicts of interest. Accounting firms were not alone in suffering financial loss related to such debacles as Enron, WorldCom, Tyco and Adelphia. While insured losses did not reach those of property catastrophes, economic damages were profound. Enron’s loss of USD66 billion in market capitalization alone - not including the economic damage caused to other companies - was more than double that of Hurricane Ike (approximately USD30 billion). The financial catastrophe is estimated to have caused economic damage of above USD1 trillion, with more likely to follow. When considered in the context of the Deepwater Horizon industrial accident, the casualty catastrophe that unraveled from the largest US offshore energy event over the past 40 years was by no means remote. Beyond the initial property loss of the actual drilling rig, liability risk in paying claims continues to extend and ripple throughout the supply chain involved as well as the environmental impact to numerous coastal and commercial businesses. Asbestos litigation, perhaps the longest casualty catastrophe on record, has paid out over USD70 billion and by some accounts may be entering its third wave. Therefore, asbestos is an emerging crystalizing risk that needs to be continuously monitored, measured and modeled for those who continue to be exposed to it.

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Cyber-attacks and terrorism are ranked among the top emerging risks concerning the (re)insurance industry in the year ahead, according to a survey released today by Guy Carpenter. According to the findings, new products, expansion into new geographic markets and access to new distribution channels will be the primary drivers of profitable growth in 2015. 

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Guy Carpenter today published a new report highlighting the continued increase in 2014 of total Asia Pacific catastrophe limit purchased. However, a confluence of factors, including the weakening of some key zone currencies has meant that reinsurance premium spend in the region has declined significantly.

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Guy Carpenter today released a new report titled Flood Risk in Asia - A Detailed Study. The report provides an in-depth study of the flood potential in Asia along with the prevention and protection systems in place.

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Guy Carpenter & Company released Part II of the two-part Ten-Year Retrospective of the 2004 and 2005 Atlantic Hurricane Seasons. Part II focuses on the 2005 hurricane season and the cumulative impacts of both the 2004 and 2005 seasons on the (re)insurance industry as well as the changes made in response to these two landmark seasons from both catastrophe model vendors and rating agencies.

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Hurricane Gonzalo approached Bermuda late Friday as a Category 3 hurricane on the Saffir-Simpson scale, before making direct landfall as a strong Category 2. Maximum sustained winds at landfall were 110 mph according to the U.S. National Hurricane Center (NHC). The hurricane caused widespread structural damage and flooding, with downed trees and power lines. However, damage was less severe than expected, with no reported fatalities or major injuries in Bermuda. After clearing Bermuda, Gonzalo made a close approach to Atlantic Canada, bringing very large waves and storm force winds, but with minimal impacts. Gonzalo is now approaching the northern United Kingdom as a powerful post tropical cyclone, where it is expected to render very heavy rain and gusty winds exceeding 60 mph (100 kilometers per hour) over the next 24 hours.

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Hurricane Gonzalo is now a dangerous Category 3 hurricane on the Saffir-Simpson scale and is expected to make a close approach to Bermuda, with closest approach this evening. Model guidance is in close agreement on this scenario. Gonzalo will be the strongest hurricane to affect Bermuda since Hurricane Fabian (2003), also a Category 3. Tropical storm winds are already affecting the island of Bermuda, and the onset of hurricane conditions is expected this afternoon. A significant surge event can be expected with battering 30 foot waves.

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Hurricane Gonzalo is forecast to make a direct hit or close approach to Bermuda sometime on Friday, most likely as a Category 3 hurricane on the Saffir-Simpson scale. Hurricane and tropical storm force winds extend outward up to 45 miles (75 kilometers) and 150 miles (240 kilometers) from the center of circulation, respectively. After clearing Bermuda, Gonzalo should eventually make landfall in Eastern Atlantic Canada as a strong post-tropical cyclone.

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Hurricane Odile made a direct hit to the Southern end of the Baja Peninsula, Mexico, Sunday night, with impacts of great severity. Maximum sustained winds at landfall were 125 mph, a Category 3 hurricane on the Saffir-Simpson scale, according to the National Hurricane Center (NHC). Odile is now a tropical storm and poses an ongoing threat of wind, surge and especially heavy rain. The wind impacts of Odile include severe to complete damage to hundreds of homes, with severe damage to hotels and the Los Cabos airport. Downed trees and power lines are widespread, and power outages have affected at least 200,000. According to the NHC, Odile is tied with Olivia, which struck in 1967, as the strongest hurricane to make landfall in the state of Baja California Sur.

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