Posts Tagged ‘reinsurance rates’



January 13th, 2015

GC Capital Ideas Top Chart Room Entries: For the Year 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the year of 2014:

 

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

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2. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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

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4. Chart: Evolution of Dedicated Reinsurance Capital, 2012 - YE 2013: The evolution of dedicated sector capital is presented in the chart. Guy Carpenter estimates this rose marginally in 2013 to USD322 billion at year-end as underwriting profits from low catastrophe claims and convergence capital inflows offset unrealized losses, sustained share buybacks and dividend payments.

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5. Chart: Catastrophe Bond Issuance and Capital Outstanding: Issuance reached a record high of USD7.1 billion, surpassing 2007’s total. Risk capital outstanding also reached an all-time high of USD18.6 billion last year.

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6. Chart: 2013 Catastrophe Bond Transactions: This table lists the 144A property/casualty catastrophe bond transactions that were completed in 2013.

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7. Chart: Top Ten Catastrophe Bond Transactions: The chart ranks deals in 2013, as compiled by GC Securities*, a division of MMC Securities Corporation. 

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8. Chart: Pension Fund Capital Under Management and Allocations into Reinsurance: As the chart illustrates , pension funds alone are worth around USD30 trillion. Based on Guy Carpenter’s analysis of possible capital allocation percentages to the (re)insurance space in consultation with sector experts, a maximum of USD900 billion of this amount could potentially be available for insurance-linked investments. This figure is, of course, much greater than currently needed, demonstrating the existing convergence-driven supply excess. Given Guy Carpenter estimates global property catastrophe limit is currently in excess of USD300 billion, and the ILS market only accounts for around 15 percent of this amount, pension funds have so far made very small investments in reinsurance relative to their overall size.

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9. Chart: U.S. Property Catastrophe Reinsurance Quoting Behavior: In this chart, the January 1, 2014 average quote across all programs is represented by the line at 0 percent, while the red dots indicate reinsurers’ distances from the mean across all the programs that they quoted. The size of the line represents the variability from the average for all quotes provided by the reinsurer. Each reinsurer is represented across the bottom of the chart by its A.M. Best rating. Quotes representing non-concurrent terms were excluded.

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10. Chart: European Property Catastrophe - Typical ROL Changes: The chart compares changes at January 2014 with January 2013.

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Click here to view additional materials in GC Capital Ideas’ Chart Room >>

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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.

January 8th, 2015

Chart: Regional Property Catastrophe ROL Index, 1990 to 2015

Posted at 3:08 PM ET

The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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January 8th, 2015

Chart: Global Property Catastrophe ROL Index 1990 to 2015

Posted at 3:04 PM ET

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

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January 8th, 2015

Chart: European Property Catastrophe ROL Trends — 2007 to 2015

Posted at 2:41 PM ET

The chart presents the European Property Catastrophe Rate On Line (ROL) trends with correlating impact of catastrophe events for the period 2007 to January 1, 2015.

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January 6th, 2015

January 1, 2015 Renewals See Lower Pricing and Broader Coverage for Clients

Posted at 11:30 PM ET

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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November 2nd, 2014

Demand for Asia Pacific Catastrophe Reinsurance Remains High in 2014

Posted at 3:30 PM ET

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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October 6th, 2014

GC Capital Ideas Top Chart Room Entries: Third Quarter, 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the third quarter of 2014:

1. Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

Read the article>> 

 

2. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

Read the article>> 

 

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

Read the article>> 

 

4. Chart: U.S. Landfall To Basin Ratio - Detected Hurricanes (1900-2013): The chart indicates that the proportion of hurricanes counted in the Atlantic Basin and those that made landfall has been very volatile through the years. While there is indeed a weak correlation between hurricane counts in the Atlantic Basin and the number of U.S. landfalls, statistical significance is a subject of some debate in the scientific community (Coughlin et al., 2009; Dailey et al., 2009).

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5. Chart: Combined Ratio for Guy Carpenter Composite, Q1 2014: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through first quarter, 2014.

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6. Chart: Return On Equity For Guy Carpenter Reinsurance Composite, Q1 2014: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2004 through first quarter, 2014.

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7. Chart: Evolution of Dedicated Reinsurance Capital, 2012 - YE 2013: The evolution of dedicated sector capital is shown in this chart. Guy Carpenter estimates this rose marginally in 2013 to USD322 billion at year-end as underwriting profits from low catastrophe claims and convergence capital inflows offset unrealized losses, sustained share buybacks and dividend payments.

Read the article>> 

 

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

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9. Chart: Catastrophe Bond Issuance and Capital Outstanding: Issuance reached a record high of USD7.1 billion, surpassing 2007’s total. Risk capital outstanding also reached an all-time high of USD18.6 billion last year.

Read the article>> 

 

10. Chart: 2013 Catastrophe Bond Transactions: This table lists the 144A property/casualty catastrophe bond transactions that were completed in 2013.

Read the article>> 

 

Click here to view additional materials in GC Capital Ideas’ Chart Room >> 

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 15th, 2014

GC Strategic Advisory Update: Reinsurers Ratings Challenged with Negative Sector Outlook

Posted at 1:00 AM ET

mark-murry-small-200 Mark Murray, Senior Vice President

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The major rating agencies covering the reinsurance sector (A.M. Best, S&P, Moody’s, Fitch) have all voiced concerns with the industry’s ability to adjust to the seemingly overwhelming headwinds currently facing the sector. With A.M. Best recently changing its outlook, the view of the reinsurance sector across the rating agencies is now unanimously negative.

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July 7th, 2014

July 1 Renewals Reveal Continued Double Digit Price Decreases Across Many Lines and Geographies

Posted at 5:00 AM ET

Guy Carpenter reports that market pressures at July 1 renewals continued to drive price decreases across virtually all geographies and lines of business, many in the double digit range. As loss activity remained minimal, reinsurers added to surplus capacity and additional capital continued to come into the market via alternative sources. 

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June 17th, 2014

Alternative Market’s Impact On Traditional Reinsurers

Posted at 1:00 AM ET

The April 1, 2014 and June 1, 2014 renewals indicate that competition from the capital markets continues to play a major role in the abundance of reinsurance capacity that is placing pressure on pricing. Here we review Guy Carpenter analyses examining the impact of the alternative markets on traditional reinsurers and how reinsurance carriers are expected to face that challenge through the year. 

Catastrophe Bond Outlook for 2014: The growing influence of alternative markets capacity is pressuring traditional reinsurers’ business model and challenging them to compete against a model with lower-cost of capital that continues to enter the reinsurance market. Most reinsurance companies have responded to the challenge by leveraging their incumbent status on reinsurance programs, offering similar or better terms and similar or reduced pricing. Particularly, traditional players are emphasizing their ability to efficiently provide reinstatements, which are seen by many as a critical part of core reinsurance programs, particularly for working reinsurance layers. Traditional players are also hedging their bets and creating their own capital markets divisions to attract, manage and utilize capital from third-party sources whether in the form of fund management, managed accounts or sidecars. This will allow reinsurers the opportunity to securitize the most capital-intensive parts of the business while providing valuable cost-efficient capacity in other business lines.

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Catastrophe Bond Update, Fourth Quarter 2013: Influence from direct capital markets’ participation in reinsurance programs, coupled with catastrophic insured losses well below historical averages in 2013, put significant pressure on global catastrophic reinsurance pricing. As a result of significantly reduced pricing (relative to recent years), approximately USD7.1 billion worth of new property/casualty (P&C) catastrophe bonds were issued in 2013 - the second largest record year for P&C issuance. The year included seven new sponsors - American Coastal, American Modern, AXIS Capital, the Metropolitan Transportation Authority (MTA), QBE, Renaissance Re and the Turkish Catastrophe Insurance Pool - who collectively secured USD1.46 billion of catastrophe bond capacity. In addition to new sponsors, another prevalent change in the market was the increasing use and acceptance of indemnity-based triggers. Given that spreads have tightened between indemnity and other trigger types, sponsors were inclined to take advantage of investors’ openness to indemnity triggers to reduce coverage basis risk without a material increase in pricing relative to non-indemnity trigger pricing.

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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.