Posts Tagged ‘World Cat’



September 12th, 2011

Uncertain Market Ahead for Reinsurance Industry, Finds Guy Carpenter’s 2011 World Catastrophe Report

Posted at 1:00 AM ET

worldcat2011A number of developments in 2011 have created an uncertain market for the reinsurance industry as it begins to focus on next year’s renewals, according to 2011 World Catastrophe Reinsurance Market Report, released  by Guy Carpenter & Company. These developments range from elevated global catastrophe activity to catastrophe model changes that have altered risk perceptions and changed expected loss amounts.

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September 23rd, 2010

World Catastrophe Reinsurance Market: Index to Links

Posted at 10:12 AM ET

worldcatthumbnail2010_thumbnailThe World Catastrophe Reinsurance Market 2010 report finds that surplus capital in the reinsurance market has been depressing prices, causing them to fall by 6 percent on average through the 2010 renewal season. Guy Carpenter estimates that the reinsurance market was overcapitalized by as much as USD20 billion, or 12 percent, at the beginning of 2010. While this amount came down to approximately 8 percent by the end of June, reinsurers’ excess capital continued to be the main driver of rate reductions at the 2010 renewals. If no market-changing event were to occur in the second half of the year, surplus capital is likely to remain the driving force behind continued rate softening at next year’s January 1 renewal, according to the study.

World Catastrophe Reinsurance Market: Part I, Introduction, Catastrophe Events >>

According to the Guy Carpenter World Rate on Line (ROL) Index, global catastrophe reinsurance rates fell by 6 percent on average through the 2010 renewal season. Although markets that suffered catastrophe losses in early 2010, such as Chile, saw prices increase, the underlying trend elsewhere was one of rate reductions. One of the main reasons for falling rates is excess capital in the reinsurance market. Guy Carpenter estimated that the sector was overcapitalized by as much as USD20 billion,or 12 percent, at the beginning of 2010. Although the overcapitalization fell back to around 8 percent by the end of June, the surplus capital among reinsurers remained the driving factor at the 2010 renewals.

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World Catastrophe Reinsurance Market: Part II, Impact on Reinsurance Market, Cat Bond Update >>

So what does all this mean for the reinsurance market and pricing? On the back of the heavy losses in the first half of 2010, reinsurers were hoping to see an end to the soft market and for prices to rise. However, Guy Carpenter data shows the high payouts have generally been insufficient to turn prices. According to the Guy Carpenter World ROL Index, global catastrophe reinsurance rates fell by 6 percent on average through the 2010 renewal season (see Figure 2) as surplus capital and capacity drove down prices. This rate decline followed an increase of 8 percent in 2009 and a fall of 10 percent in 2008.

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World Catastrophe Reinsurance Market: Part III, Catastrophe Model Developments, Impact of Changing Regulations

The increasingly complex nature of the reinsurance industry and the growth in alternative risk transfer instruments such as catastrophe bonds have reinforced the importance of catastrophe models and data management platforms in the risk management process. Such innovations have allowed (re)insurers to improve their understanding of natural perils while accurately estimating potential catastrophe losses to their portfolios and managing their exposures.

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September 22nd, 2010

World Catastrophe Reinsurance Market: Part III, Catastrophe Model Developments, Impact of Changing Regulations

Posted at 1:00 AM ET

Catastrophe Model Developments

The increasingly complex nature of the reinsurance industry and the growth in alternative risk transfer instruments such as catastrophe bonds have reinforced the importance of catastrophe models and data management platforms in the risk management process. Such innovations have allowed (re)insurers to improve their understanding of natural perils while accurately estimating potential catastrophe losses to their portfolios and managing their exposures.

Continue reading…

September 21st, 2010

World Catastrophe Reinsurance Market: Part II, Impact on Reinsurance Market, Cat Bond Update

Posted at 1:00 AM ET

Impact on Reinsurance Market

So what does all this mean for the reinsurance market and pricing? On the back of the heavy losses in the first half of 2010, reinsurers were hoping to see an end to the soft market and for prices to rise. However, Guy Carpenter data shows the high payouts have generally been insufficient to turn prices. According to the Guy Carpenter World ROL Index, global catastrophe reinsurance rates fell by 6 percent on average through the 2010 renewal season (see Figure 2) as surplus capital and capacity drove down prices. This rate decline followed an increase of 8 percent in 2009 and a fall of 10 percent in 2008.

Continue reading…

September 20th, 2010

World Catastrophe Reinsurance Market: Part I, Introduction, Catastrophe Events

Posted at 1:00 AM ET

Executive Summary

2010 has been a difficult year for the reinsurance industry after it suffered one of the most costly first halves on record. Spiraling costs from disasters such as the Chilean earthquake and the Deepwater Horizon explosion in the Gulf of Mexico meant (re)insurers’ catastrophe budgets took a severe hit even before the hurricane season had started. Although insured losses reached USD23 billion in the first six months and an active hurricane season has been forecast, reinsurance rates generally declined through the 2010 renewals as surplus capital drove down prices.

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September 13th, 2010

Reinsurance Rates Decline, Despite Costly Disasters in First Half of 2010, According to Guy Carpenter’s 2010 World Catastrophe Report

Posted at 1:00 AM ET
worldcatthumbnail2010_thumbnail2010 has proven to be a difficult year for the reinsurance industry, which suffered one of the costliest first halves on record. Despite spiraling losses, global reinsurance rates generally declined through the 2010 reinsurance renewals, according to Guy Carpenter & Company’s annual study of the global property catastrophe reinsurance market.

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September 22nd, 2009

World Catastrophe Reinsurance Market 2009: The Reinsurance Market: From Turbulence to Growth

Posted at 1:00 AM ET

worldcatChristopher Klein, Global Head of Business Intelligence
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The reinsurance industry has had a turbulent year, but it has survived the greatest financial catastrophe since the Great Depression remarkably well. Balance sheets have stabilized and have even begun to improve this year. Despite an average loss of capital of 18 percent, a string of reinsurer failures — feared by many — never materialized. Strong capital positions enabled reinsurers to absorb the financial and natural shocks of 2008 and continue to bear risk without interruption.

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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
Contact

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.

Continue reading…

September 21st, 2009

Chart: Evolving Catastrophe Reinsurance Market

Posted at 12:59 AM ET

worldcat_figure_5

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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