- Active Atlantic anticipated: Across all forecast entities spanning academia, government and private sector, there is unanimous consent the 2021 Atlantic hurricane season will feature average to above average named storms, hurricanes, major hurricanes and storm days.
- Factors driving active Atlantic forecast include above-average sea-surface temperatures in the Atlantic and west Pacific regions, as well as a forecasted transition from La Niña to ENSO-Neutral conditions.
- Ramifications for Atlantic basin landfalls: The ratio of hurricane landfalls to basin activity varies considerably from year to year, and depends strongly on steering currents. Weather prediction for any event generally loses skill beyond a 7-10 day forecast lead.
- West Pacific typhoon expectations: Through the Guy Carpenter Asia-Pacific Climate Impact Centre relationship with the City University of Hong Kong, the 2021 West Pacific forecast indicates above average activity. However, the landfalling numbers across the region vary, with above average activity most likely for South Mainland China and Vietnam.
2. Guy Carpenter Releases the 2021 Western North Pacific Basin Tropical Cyclone Briefing: Guy Carpenter published the annual briefing on the 2021 Western North Pacific Basin Tropical Cyclone season. According to the briefing, the number of tropical cyclones forecast to form between April 1 and September 30 is above normal. Near- to above-normal activity is consistent with the El Niño–Southern Oscillation (ENSO) neutral conditions which follow a weak to moderate La Niña year.
3. Narrow Artificial Intelligence Is Latest Disrupter to the Insurance Industry: Society is entering the age of artificial intelligence. Significant players in every industry are implementing narrow artificial intelligence (NAI) to improve their business processes. As a consequence, no element of the global insurance business model will be untouched. Most insurance product lines will need to be reengineered to reflect the new risks arising out of the adoption and deployment of NAI, according to Pete Thomas, President of GC Genesis, Guy Carpenter, and Samantha Busenhart, Vice President, Distribution and Thought Leadership, Guy Carpenter.
4. Video: UK Climate Stress Test a Sign of Increasing Scrutiny of Insurer Climate Risk: Jessica Turner, Managing Director, Catastrophe Advisory, Guy Carpenter, speaks with The Insurer about the Bank of England’s climate stress test. It is a sign that central banks and international regulators are looking to “ramp up” oversight of insurer climate risk.
5. Insurance Prices Are Rising, With Cyber Claiming Big Increases: Global commercial insurance prices increased 18 percent, on average, in the first quarter of 2021, although there are signs that increases may be plateauing in some regions. The first quarter increase was lower than the 22 percent seen in the prior quarter. Pricing for cyber insurance diverged from the trend, with prices generally increasing – notably by 35 percent in the United States and 29 percent in the United Kingdom – driven by the frequency and severity of losses. The data comes from the Marsh Global Insurance Market Index.
6. Three Major Political and Credit Risks Amid Pandemic Recovery: COVID-19’s impacts are too wide-ranging for any one sector to carry the risks alone, and some sort of mechanism with government participation needs to be put in place. As governments continue to implement fiscal and monetary policies in response to COVID-19, country-level economic risks are growing across all regions, according to Marsh Specialty’s Political Risk Map 2021.
7. Video: Peter Hearn: Navigating the Changing Nature of Risk – Opportunities and Reinsurance Support: Peter Hearn, CEO, Guy Carpenter, talks to Asia Insurance Review about the impact the changing risk landscape will have on the insurance industry – how the industry should respond to these changes – and how reinsurance can support these new opportunities. Reinsurance supports insurance carriers in many dimensions – it is a flexible capital tool, it supports growth, and it manages volatility.
8. Can the Insurance Industry Bridge the Pandemic Insurance Protection Gap? Pandemic insurance coverage has existed for a long time, but it has always been expensive and relatively rare. According to the Geneva Association, less than 1 percent of the estimated USD 4.5 trillion global pandemic-induced gross domestic product loss for 2020 will be covered by business interruption insurance.
9. OmniCAT® Risk Score: Severe Thunderstorm Risk Magnitude Index (SToRMi): Over the last decade, a noteworthy increase in the frequency and severity of severe thunderstorm losses across the central and eastern United States has created a lack of profitability for carriers exposed to these perils. The impact has been amplified by outdated and antiquated catastrophe models lacking the ability to properly assess the current risk. Guy Carpenter’s Severe Thunderstorm Risk Magnitude index (SToRMi) provides a transparent approach to severe thunderstorm hazard assessment to afford clients an independent and current viewpoint of risk.
10. Chart: Guy Carpenter Global Property Catastrophe Rate-On-Line (ROL) Index – 1990 to 2021: The Guy Carpenter Global Property Catastrophe ROL index was up 4.5 percent year on year, at January 1. The index is a measure of the change in dollars paid for coverage on a consistent program basis and reflects the pricing impact of a growing (or shrinking) exposure base, evolving methods of measuring risk and changes in buying habits, as well as changes in market conditions.