GC Capital Ideas highlights recent video talks from our experts, with a focus on COVID-19 developments and climate change.
Cyber Underwriters Avoid COVID-19 Exclusions Even as Ransomware Concerns Soar: Ransomware has become the most concerning development for insurers and reinsurers over the past 18 months. Small and large companies are becoming more dependent on technology to conduct their businesses and are thus increasingly subject to technology’s unique vulnerabilities. As ransomware demands have grown, insurers and reinsurers are looking at their cyber books and examining a number of ways to deal with these developments, according to Siobhan O’Brien, Head of Guy Carpenter’s International Cyber Center of Excellence.
Catastrophe Bonds in the Post-COVID Environment: In looking at the three broad segments of insurance-linked securities: catastrophe bonds, side cars and collateralized reinsurance, COVID-19 has had differing impacts. The 144A catastrophe bond market has seen a minimal impact from the pandemic’s effects. Because of a lack of valuation changes in the market it has proven to be a resilient strategy. When the broader capital markets are facing stress, the catastrophe bond market provides secondary liquidity. However, the lack of liquidity in the sidecar and collateralized reinsurance segments led to impacts from COVID-19-related losses. Cory Anger, Managing Director, GC Securities*, describes the outlook for the catastrophe bond sector in 2021.
What Governments Can Do to Identify and Build Resilience Against Climate Risks: At the start of the year climate change was viewed as the most serious threat to global prosperity and climate-related risks ranked highly in terms of likelihood and impact. Although climate change has fallen down the agenda as COVID-19 has risen up it, the pandemic has increased the threat. The costs to government balance sheets is growing. Ruth Lux, Head of Public Sector, EMEA at Guy Carpenter discusses how governments need to rethink how to fund events that place strains on public resources when they occur. Encouragingly, governments are beginning to take proactive steps to understand and manage the risks. They have a willing and able partner in the reinsurance industry.
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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities LLC, a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities LLC, MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.
