Posts Tagged ‘ROL’



September 21st, 2009

World Catastrophe Reinsurance Market 2009: A Changing Property-Catastrophe Reinsurance Industry

Posted at 1:00 AM ET

worldcatChristopher Klein, Global Head of Business Intelligence
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Evolution of the Property-Catastrophe Reinsurance Market

This year’s 8 percent Guy Carpenter World ROL Index increase differs profoundly from the 65 percent surge that followed Hurricane Andrew and the 24 percent hike following the terror attacks of September 11, 2001 in the United States. Even after losing 18 percent of its aggregate capital following the 2008 financial catastrophe, reinsurers were unable to push for the high rates that some expected. The evolution of the reinsurance industry over the past two decades suggests that carriers have become much more adept at managing risk and capital, making it easier to absorb shock losses and manage the cost to transfer risk.

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September 15th, 2009

Chart: Guy Carpenter World Rate on Line Index 2009

Posted at 12:59 AM ET

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Global property-catastrophe reinsurance rates increased by 8 percent on average through the 2009 renewal season, according to the Guy Carpenter World ROL Index. This follows declines of 6 percent in 2008 and 10 percent in 2007. In the United States, the world’s largest reinsurance market (geographically), increases were fairly uniform at the January, April, June, and July renewals, moving in a channel of 10 percent to 15 percent, depending on region, exposures, and loss history.

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September 14th, 2009

World Catastrophe Reinsurance Market 2009: Executive Summary

Posted at 1:00 AM ET

worldcatChristopher Klein, Global Head of Business Intelligence
Contact

Reinsurance rates increased by 8 percent through the 2009 reinsurance renewals, as measured by the Guy Carpenter World Catastrophe Rate on Line (ROL) Index. Upward pressure came largely from the impact of the 2008 financial catastrophe on reinsurers’ balance sheets, which was exacerbated by the effects of Hurricanes Gustav and Ike. At the January 1, 2010 renewal, reinsurance rates are likely to show little movement, unless a major property catastrophe or financial shock occurs.

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July 22nd, 2009

Mixed Bag

Posted at 1:01 AM ET

David Rains, FSA, MAAA, Managing Director and Head of the Life, Accident and Health Specialty Practice and Dean Kidd, Managing Director
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There’s no single answer to the question of capital availability in the global life, accident, and health (LA&H) market. Reinsurers are responding to the returns possible for specific risks, which is driving their capital allocation decisions. Meanwhile, cedents are uniformly focused on managing the cost to transfer risk. As these factors converge on reinsurance rates — along with concerns about investment asset performance, geography, and the underwriting profitability of other lines of business — the result is a price stalemate caused by competing pressures of comparable strength. Without an unexpected market development, the norm is likely to persist.

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April 29th, 2009

Japan 4/1 Reinsurance Renewal: Fire

Posted at 1:00 AM ET

Ed Fenton, Managing Director
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Pro Rata Fire

A change from the past few years, the Japanese fire market enjoyed a relatively straightforward renewal at April 1, 2009. During the 2008 renewal process, insurers indicated that they would undertake various measures to improve the original business that forms the subject matter of these treaties. This year, it was desirable for each buyer to provide some kind of statement or presentation to update the market as to their progress against the goals that had been outlined at last renewal. All the major players produced such a statement and these were generally well received by reinsurers.

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April 28th, 2009

Japan 4/1 Reinsurance Renewal: Earthquake

Posted at 12:30 AM ET

Ed Fenton, Managing Director
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Earthquake Pro Rata

Capacity Purchased, Pricing, and Aggregate Movements

Probable maximum loss (PML) ceded by the market declined only slightly for the second year in a row at the April 1, 2009 reinsurance renewal in Japan. Some treaty restructuring caused capacity to increase modestly, resulting in the growth in “air” capacity (i.e., the difference between theoretical available capacity and actual capacity ceded). Rate on line (ROL) grew by approximately 2.5 percent. Commissions were unchanged.

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April 28th, 2009

Chart: Japan at 4/1 Earthquake Pro Rata Market Capacity and Pricing

Posted at 12:29 AM ET

japanat4-1earthquake

Probable maximum loss (PML) ceded by the market declined only slightly for the second year in a row. Some treaty restructuring caused capacity to increase modestly, resulting in the growth in “air” capacity (i.e., the difference between theoretical available capacity and actual capacity ceded). Rate on line (ROL) grew by approximately 2.5 percent. Commissions were unchanged.

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April 16th, 2009

Chart: Japan Reinsurance Capacity and Pricing

Posted at 12:55 AM ET

marketcapacity-and-price

Overall, capacity purchased was increased for windstorm and increased modestly for earthquake. Especially in the windstorm line, though, over-placement was virtually nonexistent. Even earthquake XOL placements, many of which are traditionally over subscribed, experienced a reduction in spare capacity.

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April 16th, 2009

Chart: Japan Catastrophe ROL Summary

Posted at 12:54 AM ET

the-catastrophe-market

In the end, all companies paid increases, though they remained in the range of 5 percent to 10 percent year-over-year, with a few outliers based on program-specific circumstances.

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April 15th, 2009

April Renewals Follow January Precedent, Despite Industry Capital Conditions

Posted at 1:00 AM ET

rains_david_bioDavid Rains, FSA, MAAA, Managing Director and Head of Life, Accident & Health Specialty
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Life and personal accident (PA) reinsurance renewals sustained significant rate reductions at the April 1, 2009 renewal — in some cases as low as 10 percent. Average rate on line (ROL) was down 3.8 percent, excluding programs with large rate changes for reasons not directly related to market conditions. For example, companies with reduced subject risk due to the impact of the global financial crisis had ROL reductions that were even greater. Even layers with light losses were treated gingerly, with level pricing or slight increases year-over-year. The markets remains tipped to the advantage of cedents, despite broader market conditions that might be expected to push prices higher.

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