Risks emanating from space pose a serious and real threat to the (re)insurance sector. Space debris and satellite collisions have the potential to cause losses in the millions or even billions of dollars, while extreme space weather has the potential to cause systemic failures across the globe. Although both risks are difficult to quantify given the uncertainty involved, (re)insurers have a responsibility to promote risk mitigating measures as the potential costs involved are considerable.
Posts Tagged ‘Reinsurance’
An increasing number of (re)insurers are therefore adopting comprehensive climate change strategies to recognize the potential impact on their businesses. Investing in solutions that help predict the likely effects of global warming on the location, intensity and cost of weather-related catastrophes is critical to acquiring a better understanding of climate change risk.
Although there has been a significant increase in both economic and insured losses from natural catastrophes in recent decades, it is important to put these numbers in context. With the exception of coastal flood, inland flood and drought, the wholesale attribution of rising financial losses to an increase in hazard frequency can be misleading. Statements concerning the influence of global warming on loss trends would be better served if normalized by factors such as inflation, (per capita) gross domestic product, total insured value, population density and annualized property value. Indeed, the IPCC agrees that ignoring these factors leaves an upward trend in losses for purely economic reasons, notwithstanding any behavior in the peril. As an example, the recent “trend” in hurricane losses for the coastal United States loses clarity when normalized by inflation and population density. (1)
Transferring risk through insurance is the last step in the risk management process. Traditional insurance products have fallen short of providing protection that is required as solutions for property, fidelity, general liability and professional liability only cover very clear and precise areas of risk. While there may be overlapping coverage for some cyber risks, various exclusions mean they generally do not cover privacy and cyber perils.
Total Asia Pacific catastrophe limit purchased in 2013 increased for the tenth year in a row, but once again failed to keep pace with strong gross domestic product growth in the region, according to a new report released today by Guy Carpenter.
New Geographic Markets to Drive Profitable Growth in 2014, According to Second Annual Guy Carpenter Survey
Expansion into new geographic markets, new products and access to new distribution channels will be the primary drivers of profitable growth in 2014, according to a new survey released today by Guy Carpenter & Company. Continue reading…
Rapidly developing computer technologies and the unrelenting evolution of cyber risks present one of the biggest challenges to the (re)insurance sector today. Liabilities from cyber attacks and threats to the data security of cloud computing and social media have become key emerging risks for carriers. The unprecedented rise in cyber attacks, in addition to the threat cyber risk poses to global supply chains, has seen the cyber insurance market grow significantly in recent years.
The (re)insurance sector is today operating in a rapidly changing and uncertain risk landscape. Against this backdrop, it is important that (re)insurers attempt to identify and understand emerging risks to plan for the long term and challenge assumptions about the future risk landscape environment.
Executive teams adapting to the changing dynamics of the specialty insurance and global reinsurance markets in an environment of excess capital, growing influence of convergence participants, low investment returns and diminishing reserve releases are presented with a series of strategic dilemmas and opportunities.
The recent completion by legacy solution specialists of a number of acquisitions in the live insurance space could be a watershed moment for the standalone run-off market. The original business concept of a run-off manager was a pure focus on legacy business - to achieve finality in legacy claims and manage the outstanding book of legacy business in the same cost efficient way that an insurer would manage a renewal book of business.