Quotes and firm order terms (FOTs) were down relative to July 1, 2007 renewals. Both lower and higher layers sustained double-digit declines. FOTs for the former were down 15 percent to 20 percent year-over-year, while lower layers were off 10 percent to 15 percent. To download this chart, right-click on the image, and select "Save Picture As". If you have any trouble, please ... Continue Reading »
No Surprises, Rates Continue to Fall: P&C Reinsurance Renewals, July 1, 2008
Christopher Klein, Global Head of Business Intelligence Contact Excess capital caused soft market conditions persisted at July property and casualty renewals. For property-catastrophe covers, risk-adjusted pricing dropped 10 percent to 20 percent relative to July 1, 2007. Quote ranges narrowed, though, as reinsurers responded to the realities of the market. The weakening global ... Continue Reading »
Clashing Conventions: Measuring and Managing Exposure
Emil Metropoulos, Senior Vice President Contact Conventions are fertile ground for risk. With tens of thousands of people in one place, a single act of terror or a natural catastrophe could result in substantial insured losses for workers compensation carriers. But, it has been almost impossible to assign a number to this risk, let alone manage it effectively, since the data ... Continue Reading »
Chart: Florida – Risk-adjusted Pricing
The Floriday Hurricane Catastrophe Fund (FHCF) continues to play an important role in most companies’ overall reinsurance programs, and price decreases have been more dramatic for higher layers attaching above the FHCF. This results largely from reinsurers’ preference for more remote exposures. Firm order terms (FOTs) for lower layers (sitting below the FHCF) dropped 7 percent t ... Continue Reading »
Outlook for Florida Renewals on June 1, 2008
Kevin Stokes, Managing Director Contact Florida property-catastrophe risk-adjusted pricing is expected to decline by about 15 percent on average at June 1, 2008 renewals. A competitive reinsurance market and the absence of major insured losses are driving this trend. While disasters are not in short supply, none has had a market-changing impact. ... Continue Reading »
Manage Non-Life Catastrophe Risk with Internal Models: Custom Strategies for Solvency II Compliance
The Solvency II standard model is nearing completion. Quantitative Impact Study Draft 4 (QIS 4) was released on April 1, 2008 and will run through July 2008. In QIS 4, the non-life catastrophe risk capital component of the solvency capital requirement (SCR) calculation has been modified substantially from QIS 3 and has become more complex. In particular, QIS 4 includes a ... Continue Reading »
Understanding Unknown Convention Accumulations
Emil Metropoulos, Senior Vice President Contact The continued rise of the convention industry has created a unique clash exposure for workers compensation (re)insurers. Carriers are increasingly familiarizing themselves with “known” accumulations, the risks associated with the day-to-day workplace, since the terror attacks of September 11, 2001. “Unknown” accumulations, on the o ... Continue Reading »
Managing Prosperity: 2008 Bermuda Update Report
For the past 10 years, most Bermuda companies have outperformed the Standard & Poor’s (S&P) 500 in generating shareholder value. The Guy Carpenter Bermuda Reinsurance Composite has shown considerable book value and dividend growth. This financial performance has been driven substantially by Bermuda’s low tax rate, experienced executives and friendly regulatory reg ... Continue Reading »
The Market’s Mixed Signals: Reinsurance Renewals at April 1, 2008
Reinsurance renewals at April 1, 2008, sent mixed signals to the global market. Cedents pushed hard for rate reductions in Asia. Reinsurers stood firm, though, as rates in general are already close to technical levels. The majority of rate decreases, therefore, were single-digit. U.S. cedents pushed as well. While reinsurers resisted, competitive forces prevailed, and rate ... 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 »
