1. Mid-Year 2020 Reinsurance Renewal – Overview: GC Capital Ideas recently featured three posts covering some of Guy Carpenter’s observations on the mid-year 2020 reinsurance renewals.
2. Silent Cyber – No Longer Silent: Silent (or non-affirmative) cyber refers to cyber-related exposure within many all-risk general insurance products. If no explicit cyber exclusion applies, coverage for losses caused by cyber perils may apply. This underlying exposure’s potential for aggregated loss is currently one of the major issues being considered by the (re)insurance industry, according to Siobhan O’Brien, International Cyber Center of Excellence Leader, Guy Carpenter, and Erica Davis, North America Cyber Center of Excellence Leader, Guy Carpenter.
3. Risk-Based Capital Stress Testing: As companies continue to navigate the repercussions of COVID-19, it is important that they understand the pandemic’s impact on risk-based capital (RBC). Insurers are dealing with COVID-19’s effects on assets and liabilities, both of which can affect capital levels.
4. Diversity is Key to a Successful Business: To tackle gender and diversity issues, corporate commitment goes a long way. Guy Carpenter has been at the forefront of this change, instituting policies that encourage, nurture, and ensure diversity in the workplace. “Our goal is to have a workforce that is representative of the society that we live in. We look at ways to unlock the full potential of our workforce by creating an inclusive culture where all can thrive and grow,” says James Nash, International CEO of Guy Carpenter.
5. Standard & Poor’s Outlook on COVID-19: Standard & Poor’s (S&P) recently changed its outlook for the global reinsurance sector to negative from stable, as it anticipates a number of negative rating actions and increasingly difficult business conditions for the sector over the next 12 months. S&P assigned a stable outlook to over 80 percent of global reinsurers and projects that reinsurers will not meet their cost of capital in 2020 for a third year in a row due to COVID-19 insured losses and lower investment returns.
6. June 1, 2020 Reinsurance Renewal – The Impact of COVID-19 on Florida Property Catastrophe Pricing: The June 1, 2020 renewal marks the first genuine test of the reinsurance market since the COVID-19 outbreak prompted government-mandated lockdowns across the globe. The pandemic has compounded an already firming reinsurance environment, resulting in challenged placements and pronounced property catastrophe pricing increases, particularly in Florida.
7. Parametric Insurance Can Boost Resilience for the Public Sector: In the wake of a natural disaster, traditional insurance can help restore insured assets to their status prior to the loss. It may not always be desirable, however, to restore a situation that led to a vulnerable state in the first place. The public may want — and need — to create new approaches to urban planning, construction or water management that leverage lessons from the disaster, according to Guillermo E. Franco, Managing Director & Global Head of Catastrophe Risk Research at Guy Carpenter.
8. June 1, 2020 Reinsurance Renewal – The Market Reevaluates Exposures as Conditions Tighten: Even before the COVID-19 crisis, the reinsurance market was facing an increasingly challenged operating environment. Shifting views of risk, a lack of new capital inflows, higher loss cost trends and deteriorating loss experience led to tightening market conditions at January 1, 2020 renewals.
9. Why Human Resources is a Key Stakeholder in Cyber Risk Management: The human resources (HR) function has become integral to organizational cyber risk management in recent years. Along with information security/information technology (InfoSec/IT), HR is increasingly called upon to help determine and enforce employee data permissions, train and enforce cybersecurity policies and procedures and help respond to cyber events involving employees.
10. Why We Need Community-Based Catastrophe Insurance: The impacts of COVID-19 on individuals, communities and insurers are continuing to unfold and no doubt present uncertainty. However, the current disruption also serves to highlight the importance of lessening reliance on federal financial relief and, instead, creating financial resilience at the community level.