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.
Posts Tagged ‘rating agencies’
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.
In Figure 1, RBC Ratio is defined as the ratio of aggregate Total Adjusted Capital to Authorized Control Level RBC for each of 111 combined insurance groups. Plotted against BCAR, there is clearly a strong correlation between the measures, though the relationship is not perfect.
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.
Micah Woolstenhulme, Senior Vice President
At the 2012 Casualty Actuarial Society (CAS) Annual Meeting in Orlando, Florida, the general session, “Economic Capital Modeling for ORSA in the U.S. Property and Casualty (P&C) Industry: The Stakeholders Convene,” afforded participants a novel opportunity to satisfy their continuing education credits. 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.
Although improvements in ERM practices meant (re)insurers were better prepared for the major catastrophes of 2010 and 2011 than those in 2005, the global nature of these losses has prompted some companies to review their perception of risk. This international loss trend, along with insurance growth in emerging market regions, is driving the need for better and more comprehensive tools for modeling risk. It also reinforces the need for (re)insurers to carefully consider how and where they diversify their business geographically and the adequacy of pricing in these territories.
Paul Silberbush, Managing Director
Capital models are becoming more and more “embedded” into property and casualty (re)insurers’ business processes. These models are typically constructed with two distinct and often contrasting purposes: 1) measuring capital for rating agency and/or regulatory requirements and 2) risk management and strategic business planning.
Standard & Poor’s (S&P) proposed insurance rating criteria framework includes significant changes that may adversely impact financial strength ratings of (re)insurers. The new framework is expected to be published and become effective in early 2013. Guy Carpenter has examined the three key proposed criteria changes. In our opinion, these can drive rating changes especially for (re)insurers in the United States and other developed countries with “A” and “AA” range financial strength ratings.
The Market ratings remain the principal measure of financial strength to be applied to operations underwriting at Lloyd’s, but several rating agencies separately provide syndicate-specific analysis. These analyses can support the reinsurance-buying decision-making process, but it is dangerous to rely on them without understanding the varying underlying methodologies. (None of these products are endorsed by Lloyd’s.)