Posts Tagged ‘Reinsurance’
Cyber-attacks and Terrorism Revealed as Top Emerging Risks for 2015, According to Annual Guy Carpenter Survey
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.
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.
Average limits purchased by companies with revenues exceeding USD1 billion rose 10 percent in 2013 to USD28.2 million from USD25.7 million in 2012. For companies of this size, financial institutions purchased the highest average limits at USD53.2 million, which represented a 9 percent increase from 2012. These average limits do not reflect the limits purchased by companies that blend cyber with the limits they purchase for errors and omissions (E&O) or bond. Since December 2013, there has been a stronger desire to obtain much higher limits than those purchased earlier in 2013. That trend is expected to continue.
Mutual insurance companies of all sizes currently face challenging market conditions where success requires not only focused distribution and operational excellence, but also access to increasingly sophisticated analytics services and products. How these firms use their resources and advanced technology to respond to these issues will separate market outperformers from underperformers.
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.
Guy Carpenter hosted “The Reinsurance Industry of the Future,” the Reinsurance Symposium held in Baden-Baden, Germany on October 19. A distinguished line-up of industry luminaries expressed their views on whether the current changes impacting the reinsurance sector are permanent and structural in nature, are a tactical response to short-term conditions, or are part of the normal evolutionary process.
Matthew Day, Head of Rating Agency Advisory, Strategic Advisory EMEA - Capital Optimization
What drives (re)insurer capital planning? Maybe it is risk appetite, internal dynamic capital modeling or actuarial analysis. Or perhaps it is external pressure from regulators, rating agencies or investors. In reality, it is probably a combination of all of these factors. Faced with conflicting views of what constitutes both the available capital and the assessment of the amount required relative to the risk, optimizing (re)insurer capital adequacy is likely to be a key challenge confronting a company. Rarely will the company be able to fully satisfy all the demands. Developing a management framework to evaluate, analyze and compare these divergent needs is therefore essential to extract the maximum efficiency from (re)insurer corporate capital structure.
Massimo Reina, CEO, Continental Europe & MENA, Guy Carpenter & Company, LLC
It should come as no surprise that there is a general trend among larger cedents to centralize reinsurance buying decisions and retentions and to bundle homogeneous products. This has become possible with the improvement of available portfolio data. This practice has some obvious advantages for buyers, such as reduced spend, reduced administration, improved control over counter-party credit risks and, possibly, retention of additional profits that would otherwise be ceded to reinsurers.