Through the Affordable Care Act, many measures are being implemented that are expected to have a positive impact on bending the healthcare cost curve downward in the long term. However, the same act removed annual and lifetime limits for medical insurance claims. As a result, the maximum potential loss from a single individual is a new frontier of risk, with new heights being reached each year. This is both a frequency and severity issue.
Posts Tagged ‘US’
The impact of rising healthcare expenses has been and will continue to be felt around the world, in developed and undeveloped nations alike. Rising healthcare costs are putting a strain on governments worldwide. Nowhere in the world, however, are expenses as high as they are in the United States, where the impact extends into the medical component of workers compensation costs. Although the rate of growth has seen some stability, it still outpaces the US growth rate of inflation. The figure below illustrates that per capita spending in the United States in 2010 was over USD 8,000. A key driver for higher US costs is that it spends more on hospital care and medical specialists. Hospital costs are 60 percent higher in the United States than in other Organization of Economic Cooperation and Development countries. Spending on the use of specialists is more than two times higher. Forecasters believe this trend will increase.
Hurricane Patricia made landfall on the Pacific Coast of Mexico as a Category 5 hurricane on the Saffir-Simpson Scale. Patricia was a compact storm, and made landfall in an area of relatively low population density. Reported impacts in the immediate landfall area are severe. However, the track and compact nature of Patricia appears to have spared Puerto Vallarta, Manzanillo and Guadalajara from the most severe impacts, according to media reports.
Guy Carpenter today released a new briefing that assesses wildfire risk in the United States. The briefing, U.S. Wildfire: An Ever Present Hazard, provides insight into the ongoing threat of wildfires in the U.S. as well as risk mitigation strategies and portfolio modeling for this peril.
Cyber risk is one of the most pressing and public topics that industry is grappling with and is being addressed as a strategic priority in corporate boardrooms and by governments around the world. As the global economy becomes increasingly dependent on e-commerce and cloud computing, the susceptibility to cyber risk increases exponentially.
The National Association of Insurance Commissioners (NAIC) has been continuously engaged in the formulation of the regulatory standards that the International Association of Insurance Supervisors is developing, but has expressed several concerns due to the different legal, regulatory and accounting systems that exist. The NAIC does not want the Insurance Capital Standard (ICS), which is to be a consolidated group-wide standard, to undermine the legal entity capital requirements in the United States. As a result, the NAIC is trying to ensure that any ICS be supplemental to jurisdictional capital requirements and include a common methodology by which it achieves comparable (substantially similar) outcomes across jurisdictions. The NAIC is working through the ComFrame Development and Analysis (G) Working Group (CDAWG), which was formed early last year, to provide on-going input with respect to all developments in this regard.
Torrential rainfall in South Carolina led to catastrophic flooding throughout the state over the weekend, claiming the lives of at least nine people. Large swaths of the state have experienced over 20 inches of rain in the past week with another two to six inches forecasted through Monday, according to the state climatologist.
Globalization in the insurance industry has historically been characterized by North American companies seeking to expand their business models to Europe, with Asia and South America as their secondary focus. European companies have sought to expand into North America, Asia and Latin America (for Spanish and Portuguese speaking companies).
Here are recent CAT-i stories from the period July to mid-September of 2015.
The reality is that many external forces continually disrupt the impact on merger & acquisition (M&A) activity of the insurance pricing cycle. This is especially true in recent years as insurance markets are influenced by wider financial conditions, new investors, globalization and the benefits of healthy profits despite a prolonged period of rate softening. These disruptive forces provide both positive and negative contributions to the M&A-conducive market conditions resulting from the current stage in the insurance cycle.