The October 2011 issue of Reactions is now online.
The cover story focuses on the catastrophe risk model changes in the US and Europe by Risk Management Solutions (RMS), which have caused a big stir among insurance and reinsurance companies. The changes have caused a big change in exposures, making some critics unhappy with the adjustments they will need to make while RMS’s rivals have been busy hyping the benefits of their more gradual approach to model updates.
In other features, we reveal the casualty market is in an unusual position of having had a great run of results despite rates falling for years, but with potential exposures from the uncertain economic climate on the horizon. We also review the surplus lines market, including an interview with the president of Lexington, AIG’s surplus line unit.
In addition, we reveal US cedants’ favourite reinsurers in our exclusive write-up of Flaspöhler Research Group’s survey, unveil Europe’s biggest cedants in our AM Best ranking, interview the CEO of Greenlight Re about why his firm is different from other reinsurers, and hold a roundtable on where reinsurers can find growth in the coming years.
Updates to catastrophe risk models have become a big talking point this year for insurers and reinsurers, with critics savaging RMS for its US wind update having a bigger effect than any of the actual catastrophes this year.
The casualty market is experiencing mixed pressures from depressed economies, falling insurance rates but low losses, making the outlook for the market unclear, concluded a CEO panel at a Reactions conference.
All the pre-conditions are in place for a market turn, but market is nonetheless likely to move sideways for a while yet, said CEOs from XL Group, Ironshore, Endurance Specialty, Alterra Capital and Starr Indemnity & Liability at a Reactions conference.
Reinsurance CEOs say US market in transition: PCI Forum
Ahead of the Property Casualty Insurers Association of America’s annual meeting, Reactions in association with Towers Watson asked the CEOs of Swiss Re Americas, Munich Re America and Hiscox Bermuda their thoughts on the hot issues facing the US market.
EXCLUSIVE - Leading US reinsurers named
The latest US cedant survey from Flaspöhler Research Group reveals which reinsurers are the favourite among US reinsurance buyers
The US surplus lines insurance market is outperforming the standard lines market but premiums are being squeezed faster. The market is battling the twin challenges of property losses and an uncertain economic outlook.
The excess and surplus lines market is battling twin challenges of property losses and an uncertain outlook, David Bresnahan, president of Lexington Insurance Company, tells Reactions in an exclusive interview. But the market is poised to benefit from much needed reform implemented in July.
The Nonadmitted and Reinsurance Reform Act, which came into effect on July 21 as a provision of the Dodd-Frank Act, has been welcomed by surplus lines insurers but is the subject of much broker confusion.
Greenlight Re is not your average reinsurer – it brings a hedge fund’s mindset to both sides of the balance sheet.
Roundtable: Reinsurance market grasping for growth
Reactions in association with the Qatar Financial Centre Authority brought a high-level panel together at the Monte Carlo Rendez-Vous - including executives from XL Re, Aspen Re, Endurance and Alterra - to ask what opportunities exist for growth.
Retention levels for European reinsurance buyers were stable in 2010. But with a punishing series of catastrophes in 2011 this is set to change. Reactions reveals exclusive AM Best data on which insurers buy the most reinsurance in Europe.
Opinions ranged between cautious optimism and resignation about the state of reinsurance pricing at this year’s Monte Carlo Rendez-Vous. While the overall rates picture seems in disarray, Reactions tried to discern at least some of the pieces making up the puzzle.
Reinsurers readying themselves for the renewal scrum down with European cedants in Baden-Baden will meet serious push-back on rates, according to brokers.
Insurers need to get used to soft markets and work hard to innovate to make the most of them, Pat Ryan, CEO of Ryan Specialty Group, told a Reactions conference, noting in particular the opportunity to innovate to provide earthquake insurance.
Do reinsurers need a radical rethink?
Rather than waiting for a turn in reinsurance pricing, reinsurers may need to rethink their strategy for standing out from the crowd, says Reactions’ editor Michael Loney.
Lloyd's - a story of loss and gain
Despite a large first-half loss, Lloyd’s of London remains extremely attractive judging by the fevered interest in buying managing agents, says Reactions’ contributing editor Garry Booth.
Munich Re - performance guaranteed
Munich Re has spotted a possible new opportunity and started a market for the sort of performance guarantee insurance needed to make start-up renewable projects work for investors as well as their sponsors, says Reactions’ contributing editor Garry Booth.
Riskbitz: Robots to replace actuaries
The London team behind the project is trying to understand how the human brain perceives faces, and then teach the actuary robots to recognise the emotions of people they interact with.
Riskbitz: Rating agency spells out what you already know
Added pressure is coming from the widespread panic and confusion created by cat model revisions. The new models revised property PMLs up by 4,500%.
Riskbitz: Insurance-linked reinsurance poised for growth
Gnome Re, a pioneer in the development of the ILR sector, has underwritten both life and non-life risks.
Riskbitz: Dissant Re to initiate novel buy-back programme
A spokeswoman for the company, Abby Downton, said that the reinsurer wished to buy back all the reinsurance cover it gave away for peanuts in the misplaced hope that 2011 would be a cat-free year and that investment returns would improve.