Posts Tagged ‘rating agencies’
There is a great deal of overlap between the goals of government regulators and credit rating agencies. The difference, however, is in the output, with regulators providing a license to trade, or not, and the rating agencies offering a graduated scale of relative strength. Regulatory solvency approval can be viewed as a “qualifier” or minimum standard required to be considered by a customer. A credit rating, on the other hand, can act as a “winner” or differentiating factor that results in a successful sale.
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.
A.M. Best’s New Analytics Will Broaden and Improve P&C Industry Capital Modeling and Benchmarking of Tolerances
Jack Snyder, Managing Director, Business Development and Head of the Rating Agency Practice, Strategic Advisory; Eric Simpson, Managing Director in the Rating Agency Practice and Mark Murray, Senior Vice President in the Rating Agency Practice
A.M. Best’s rating analytics continue to evolve and the pace of change is accelerating as the industry embraces more analytical tools, emerging best practices, and peer benchmarking.
Prior to September 11, 2001, coverage for terrorism-related losses was generally included in standard catastrophe reinsurance agreements without specific charges. However, the USD20 billion loss that reinsurers paid out following the September 11, 2001 attacks prompted companies to quickly exclude terror coverage in standard agreements for most lines of business. Terrorism exclusions therefore became standard in catastrophe reinsurance programs at the January 1, 2002 renewal, seriously diminishing the availability of terrorism reinsurance capacity. Concerned that the lack of terrorism coverage would hit the American economy, the US Congress passed the Terrorism Risk Insurance Act (TRIA) into law in November 2002.
Guy Carpenter today announced the appointments of Eric Simpson as Managing Director and Mark Murray as Senior Vice President. Mr. Murray reports to Mr. Simpson, who reports directly to Jack Snyder, Managing Director, Head of the Rating Agency Practice, Guy Carpenter Strategic Advisory. Both are based in the Philadelphia office. Mr. Simpson joined Guy Carpenter on April 28 and Mr. Murray on April 21.
Guy Carpenter Insights on A.M. Best’s 2013 Updates: A.M. Best has recently issued several insurance ratings updates. Guy Carpenter has reviewed those updates and has key insights to help companies better understand their potential impact.
Uncertainty in Catastrophe Models: How Much of it is Reasonable? It seems reasonable to expect a degree of uncertainty in catastrophe model results. It is not uncommon, however, for models to produce results that differ by several factors. In order to assess how much of this uncertainty is epistemic, due to our incomplete knowledge of the physical phenomena involved, this existing uncertainty needs to be quantified.
Guy Carpenter announced the launch of its new Mutual Company Specialty Practice, which will focus exclusively on the unique needs of mutual insurance companies. The practice will consist of a team of seasoned professionals dedicated to helping mutual company clients protect their capital and grow profitably.
Micah Woolstenhulme, Senior Vice President
This post is Part II of an earlier post that reviewed a session held at the Casualty Actuarial Society Annual Meeting. In that session, attendees hypothetically viewed the P&C industry as a single large company. Audience members were shareholders and session panelists adopted various executive and leadership roles in the company. The meeting’s task was to vet an economic capital model before the board of directors, allowing individual shareholders the freedom to openly question the model’s input and results. This model, if properly developed and embedded into the company’s strategic management, would represent a key component of the Own Risk and Solvency Assessment (ORSA) Summary Report that will be required of large companies in the industry as early as 2015. Along the way, the presentation and board discussion were interrupted to poll the audience members on several interesting questions.