David Priebe, Chairman of Global Client Development Contact High-velocity capital was crucial in 2005 and 2006. Hurricanes Katrina, Rita, and Wilma struck with unexpected consequences, and (re)insurers were left with a USD34 billion price tag. Balance sheets were drained, and the hunger for fresh capital was universal. Some replenishment did come from the dedicated capital of ... Continue Reading »
Capital Markets
Capital Constraints: The New Reality?
Mark Hewett, Chairman of London Operations Contact For several years, carriers have enjoyed a period of low insured losses, and access to cash has not been a problem. Traditional sources have been bolstered by the largesse of hedge funds, private equity funds, and even the wealth of high-net worth investors through a variety of insurance-linked securities (ILS). But, credit ... Continue Reading »
Looking at a Downturn?
Peter Zaffino, President & CEO Contact All eyes will be on January, 1 2009. As we approach the next renewal season, another round of rate decreases seems likely. The pace should be slower than it was through 2008, thanks to greater underwriter discipline than in previous downturns. Thus, even though the market has not been catastrophe-free, it has been able to absorb the ... Continue Reading »
Bag Profits Early: Investment Gains Under Pressure
Christopher Klein, Global Head of Business Intelligence Contact Asset-driven losses have put pressure on earnings. Investment gains comprise an important part of carriers’ long-term profits, and financial markets have shown just how volatile this source can be. With net income off 60 percent from the first half of 2007 to the first half of 2008, carrier profitability will b ... Continue Reading »
The Catastrophe Bond Market at Year-End: The Market Goes Mainstream*
After a decade of use and refinement, catastrophe bonds (“cat bonds”) have matured substantially. They have become integrated into modern catastrophe risk management practices. Issuance activity rates accelerated dramatically, even in the wake of two consecutive annual new issuance records. With rates softening for traditional reinsurance capacity, a third consecutive rec ... Continue Reading »
2008 Reinsurance Market Review: Near Misses Call for Caution
Cedents took advantage of a buyer’s market. Many 2008 renewals closed late as cedents held out for lower rates in the continuing soft market. Reinsurers were rewarded not only with lower rates, but often smaller lines. The absence of large catastrophe losses was a key factor in the softening of reinsurance markets. Barring large catastrophe losses in 2008, the downward drift in ... Continue Reading »
