Risk Management in Insurance
|
|
- Barnaby Joseph
- 6 years ago
- Views:
Transcription
1 University of Cologne Department of Risk Management and Insurance Risk Management in Insurance Value and risk based management with special consideration of Solvency II Salzburg University April / Thursday 20 th / 2017 Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at Salzburg University
2 University of Cologne Department of Risk Management and Insurance Risk Management and / in Insurance Part I Risk Management Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at the University of Salzburg
3 University of Cologne Department of Risk Management and Insurance 4. Risk Financing, special issue: Reinsurance and Alternative Risk Transfer Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at Salzburg University
4 Table of Contents 1. Functions of Reinsurance a. How reinsurance works b. Why do Insurers buy Reinsurance? 2. Types of Reinsurance a. Proportional Reinsurance b. Non-Proportional Reinsurance 3. Finite Reinsurance (Financial Reinsurance) a. The Purpose of Reinsurance b. Characteristics of Finite Reinsurance c. Forms of Finite Reinsurance 4. Alternative Risk Transfer a. What is Alternative Risk Transfer? b. Why ART developed? c. Types of Alternative Risk Transfer 4
5 References Carter, Robert L. / Leslie D. Lucas: Reinsurance Essentials, 1st Edition, Reactions, Culp, Christopher L.: Structured Finance and Insurance The ART of Managing Capital and Risk, 1st Edition, Wiley, Cummins, David J.: Handbook of International Insurance Between Global Dynamics and Local Contingencies, 1st Edition, Springer, Paine, Chris: Reinsurance, 1st Edition, Institute of Financial Services, Phifer, Ross: Reinsurance Fundamentals Treaty and Facultative, 1st Edition, Wiley,
6 University of Cologne Department of Risk Management and Insurance Reinsurance and Alternative Risk Transfer 1. Functions of Reinsurance a. How reinsurance works b. Why do Insurers buy Reinsurance? Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at Salzburg University
7 How reinsurance works Reinsurance is an insurance transaction between insurance companies Original Risk Coinsurers A B C D E Reinsurers Retrocessionaires a b c 7
8 How reinsurance works This transaction has the following basic requirements: An insurable interest must exist (original insurance risk), Original Risk must already exist at the beginning of the reinsurance contract, although it may change during the period of the contract, Reinsurance must transfer some portion of the risk from cedent to reinsurer, Some rewards (premium, profit expectation) must be passed from the cedent to the reinsurer, Reinsurance relies upon the good faith of both the cedent and reinsurer, The agreement is one of indemnity payment in the case the original risk occurs, The reinsurer is liable only to the cedent but not to the cedent s customer. 8
9 Why do insurers buy reinsurance? 1. Capacity: perhaps the most obvious need, by passing part of potential claims liabilities to a reinsurer, an insurer can afford to accept larger individual (original) risks, 2. Extreme Events (catastrophe cover: natural desaster, man made hazard): Reinsurance is needed to limit the impact from a single catastrophic event to the primary insurer (portfolio homogeneity), 3. Profit Stabilization (working cover): Reinsurance allows an insurer (cedent) to smooth its results over time, 4. Financial interests: By smoothing claims costs an insurer reduces the risk of unacceptable large falls in profits, In so doing the insurer is able to finance the expansion of its business. 9
10 Why do insurers buy reinsurance? 5. Market Intelligence: Insurer may use reinsurance as a vehicle to gain access to the experience of a specialist in a particular field (region, line of business), Reinsurer provides his cedent with statistic data all over the market, 6. Advice Reinsurer do provide support for ceding companies (education, training), Reinsurer is motivated to help improve the profitability of its reinsureds (deeper knowledge about the original risk), 7. Margin Attractive commissions and leveraged margins motivate the purchase of reinsurance, But reinsurance is a long-term relationship, where the reinsurer may accept a loss in one year, with the understanding that the terms will permit reasonable profit over a reasonable period of time. 10
11 University of Cologne Department of Risk Management and Insurance Reinsurance and Alternative Risk Transfer 2. Types of Reinsurance a. Proportional Reinsurance b. Non-Proportional Reinsurance Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at Salzburg University
12 Types of reinsurance Proportional reinsurance The reinsurer receives an agreed proportion of the original premium, less commission, and pays the same proportion of all losses Non-proportional reinsurance In return for an agreed premium the reinsurer accepts liability for losses incurred by the reinsured in excess of an agreed amount, subject to an upper limit Quota share Surplus Excess of loss Stop Loss A fixed proportion of all risks accepted by the insurer are ceded to the reinsurer if within the terms of the treaty, subject to a cession limit Only amounts accepted by the insurer greater than its own retention are ceded to the reinsurer for risks falling within the treaty, subject to a cession limit The reinsurer is liable for the balance of losses exceeding the reinsured s deductible, subject to an upper limit The reinsurer is liable for the balance of aggregate losses for a year that exceeds an agreed amount, subject to an upper limit 12
13 Proportional reinsurance Proportional reinsurance is where the insurer (cedent) reinsures to the reinsurer a proportion of the risk in relation to the retention of the ceding company. The reinsurer receives the same proportion of the original premium as the amount of risk ceded. The reinsurer pays to the cedent a ceding commission, which is deducted by the cedent from the ceded premium payable to the reinsurer. The reinsurer pays claims in the same proportion as the ceded risk and premium. Both quota share and surplus treaties involve the proportionate sharing of the original premiums. 13
14 Quota Share Reinsurance The reinsurer accepts liability for the same share of every risk written by the ceding company that falls within the scope of the treaty The division of total loss between reinsurer and insurer in a quota share treaty can be illustrated as S = S i + S Ri, where S Ri = q*s with E(S Ri ) = q*e(s) and S i = (1 q)*s with E(S i ) = (1 q)*e(s). 14
15 Quota Share Reinsurance Example: Division of insurance, premium and losses between ceding company and reinsurer under a quota share treaty with a 25 percent retention (assumes only one loss) Primary Policy Amount of insurance Premium Loss Retention by ceding company Insurance Premium Loss Ceded to reinsurer Insurance Premium Loss in 1,000,000 10, , ,000 2, , ,000 7, ,000 15
16 Surplus Reinsurance Surplus is where the amount the cedent reinsures is surplus to its own retention. Ceding company's retention is a line which is called maximum (M) The amount surplus to the retention is reinsured as a multiple of M Sum insured (V) of primary policy The reinsurer accepts liability for a share only of risks accepted by the cedent above its own net retention limit: and S Ri = V - M V S with E(S Ri ) = V - M V E(S) S i = M S with E(Si ) = V M V E(S) 16
17 Surplus Reinsurance Example: Division of insurance, premium and losses between ceding company and reinsurer under a surplus treaty with a retention of 100,000 (assumes only one loss per policy) Primary Policy Number Primary Policy Amount of insurance 1,000, ,000 10,000 Premium 10,000 1, Loss 500,000 50,000 5,000 Retention by ceding company Insurance 100, ,000 10,000 Premium 1,000 1, Loss 50,000 50,000 5,000 Ceded to reinsurer Insurance 900, Premium 9, Loss 450,
18 Non-Proportional Reinsurance The amount of a risk reinsured is not in proportion to the retention of the reinsured. The insurer decides how much of the risk it wants to retain, and will keep all claims that fall within its retention which is called priority (P). The balance of any claim that exceeds the retention is recovered from the reinsurer up to the limit of the cover which is called layer (L). The reinsurer does not pay anything on losses equal to or less than the priority. If the claim exceeds both priority and layer the insurer bears the exceeded portion. 18
19 Non-Proportional Reinsurance (II) The division of total loss between reinsurer and insurer in a non-proportional treaty can be illustrated as: 0 für S<P S für S<P S Ri = S-P für P<S<P+L S i = P für P < S <P+L L für S>P+L S-L für S>P+L 19
20 Non-Proportional Reinsurance Layer Amount of Loss Priority Ocurred Loss Primary Insurer Reinsurer Source: Liebwein, Peter: Klassische und moderne Formen der Rückversicherung, 2nd Edition, VVW
21 University of Cologne Department of Risk Management and Insurance Reinsurance and Alternative Risk Transfer 3. Finite Reinsurance a. The Purpose of Reinsurance b. Characteristics of Finite Reinsurance c. Forms of Finite Reinsurance Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at Salzburg University
22 The Purpose of Reinsurance Protect insurers from underwriting losses Assist in the financing of insurance operations Provide an insurer with administrative and technical services Therefore reinsurance contracts can be divide into two groups: 1. contracts, with the primary aim to transfer underwriting risk 2. contracts, with the primary aim to achieve financial goals 22
23 Characteristics of Financial (Finite) Reinsurance There is no universally accepted definition of financial (finite) reinsurance. But, financial (finite) reinsurance aims to directly address the financial outcome of the insurance process. Financial (Finite) Reinsurance as a transaction in which financial considerations dominate the buyer's motivation. They seek to achieve financial goals as their primary purpose, rather than insurance underwriting targets. The transfer of insurance risk to the reinsurer is limited (finite reinsurance) or non-existent (financial reinsurance). 23
24 Types of risk in reinsurance Essential to an understanding and analysis of the nature and protection afforded by a financial reinsurance contract is the extent to which it provides cover against the following types of risk: Insurance Risks Underwriting risk, Reserve risk, Timing risk, Financial Risk Investment risk (market price / interest rate), Credit risk, Central issue therefore: How much insurance risk has to be transferred so that the contract is viewed as insurance contract? (accounting perspective / regulator s perspective) 24
25 Forms of Financial Reinsurance Retrospective aggregate loss covers These contracts allow an insurer to transfer to a reinsurer its liability for losses incurred on business written in previous years. They enable a company to finance outstanding and IBNR losses on a block of existing business for a premium less than the sum. That relieves the company of balance sheet strain and enables it to distribute profit earlier. Types of retrospective contracts: Time and Distance Loss Portfolio Transfer Adverse Development Cover 25
26 Forms of Financial Reinsurance Prospective aggregate loss covers These contracts cover future losses that may be incurred either on a specified class of insurance business The principal objective is to smooth the cedent's net loss experience over a time by absorbing adverse loss experience Types of prospective contracts: Financial Quota Share Funded Cover Spread Loss Treaty Blended Cover 26
27 University of Cologne Department of Risk Management and Insurance Reinsurance and Alternative Risk Transfer 4. Alternative Risk Transfer a. What is Alternative Risk Transfer? b. Why ART developed? c. Types of Alternative Risk Transfer Prof. Dr. Heinrich R. Schradin Chair of General Business Administration, Risk Management and Insurance, University of Cologne Visiting Professor at Salzburg University
28 What is Alternative Risk Transfer? ART products are contracts, structures or solutions provided by insurance companies that enable firms either to finance or to transfer some of the risks to which they are exposed in a nontraditional way, thereby functioning as synthetic debt or equity in a customer's capital structure 28
29 Why ART developed? ART solutions help to expand the set of possible insurable risk ART not only provides solutions for unique problems, it can also improve the situation of the risk bearer ART solutions have played an important role since then by improving insurers capacity to withstand catastrophic-risk losses Catastrophe exposures require a greater allocation of corporate capital than ever before... (Smith / Canelo / Di Dio 1997, in: Geneva Papers on Risk and Insurance) 29
30 Why ART developed? U.S. Capital Markets Capitalization (1997): ~ bn. USD, with a daily standard deviation of ~ 150 bn.. USD U.S. Primary Insurance: Capital and Surplus, ~ 220 bn. USD U.S. Reinsurance: Capital and Surplus, ~ 20 bn. USD 30
31 Types of Alternative Risk Transfer Types of Alternative Risk Transfer Traditional Risk Carriers Novel Risk Carriers Financial Re Securitization Derivates Captives Cat-Bonds Futures CATEX Contingent Capital Options 31
32 Risk Securitization Basic structure Primary insurance Reinsurance Securitization 1 premium policyholder insurance contract 4 5 Refunding Administration 2 reinsurance Premium insurer / cedent reinsurance contract Promotor / stockholder 5 commission management SPV 4 interest / repayment refunding debitor (money Schuldner market) 3 Insurance linked bond Issue price investor 32
33 Risk Securitization Insurance Linked Bond (insurance linked securities / cat bonds) Bond whose interest payments (coupon at risk) and / or principal payment (principal at risk) depends of claims experience of a given insurance risk and a defined period. The ability to securitize (catastrophe) risk unlocks the vast potential of the global capital markets. Investors in Insurance Linked Bonds (syn.: Insurance Linked Securities, CAT- Bonds) benefit not only from the relatively high yields offered on these securities, but also from the additional diversification that results from the fact that catastrophic risk is essentially uncorrelated with financial risk. Tapping into the capital markets allowed insurers to diversify their risk and expand the amount of insurance available in catastrophe-prone areas. The issuance of bonds is becoming an increasingly popular option for transferring noncatastrophe risks as well. 33
34 Insurance Derivatives In 1992 the Chicago Board of Trade (CBOT) introduced catastrophe future contracts (CATs) These contracts were intended to track broadly insured losses arising from natural catastrophes Because no underlying is readily identifiable for such contracts, the CBOT created an index that imparts values to the future contracts by the contracts` reference to the index level at settlement The index is based on losses reported quarterly to the independent Insurance Services Office (ISO), which collects information from about 100 insurers 34
35 Insurance Derivatives In 1995 the CBOT introduced catastrophe insurance options based on PCS indexes PCS options are cash-settled options with an underlying cash value determined by a new index PCS provides estimates of nine catastrophic loss indexes on a daily basis. These indexes are geographical and track PCS-estimated insured catastrophe losses nationally, by region and by state PCS index measures a loss, not a loss ratio PCS purchasers have a choice between two loss development periods: 6 or 12 months 35
36 Classification of ART Techniques (similar to the scheme of Doherty) Assets Liabilities E A L Occurrence of a risk Assets Liabilities E 1 A 1 L Effectiveness of ART Assets Liabilities E 2 Assets Liabilities E 1 -L 2 Assets Liabilities E 1 A 2 E 2 A 1 L A 1 L A 1 L A 2 36
37 Classification of Reinsurance/ART-Hedging-Techniques How to compensate the claim payment on the balance sheet? Asset Hedge: Compensation by asset growth: (e.g. reinsurance, finite risk, Insurance Derivatives) Liability Hedge: Compensation by decline in other liabilities, in particular interest payment, principal repayment (e.g. securitization). Capital management: Compensation by exogenous increase in equity capital (e.g. contingent capital, equity put options). 37
06/02/2012. Market Shocks! Week 2. Proportional Reinsurance: Operation & Application
Week 2 Proportional Reinsurance: Operation & Application Market Shocks! 1 What is the function of reinsurance? Methods of Reinsurance Facultative v Treaty also facultative obligatory arrangements and open
More informationCatastrophe Exposures & Insurance Industry Catastrophe Management Practices. American Academy of Actuaries Catastrophe Management Work Group
Catastrophe Exposures & Insurance Industry Catastrophe Management Practices American Academy of Actuaries Catastrophe Management Work Group Overview Introduction What is a Catastrophe? Insurer Capital
More informationASSAL. Reinsurance. Walter Bell Alabama Commissioner of Insurance NAIC President
ASSAL Reinsurance Walter Bell Alabama Commissioner of Insurance NAIC President 1 Purpose of Reinsurance Regulation Police the Solvency of Reinsurers and Ceding Insurers Ensure the Collectability of Reinsurance
More informationSupplemental Background Material. Course CFE 3. Reinsurance. (Passing grade for this exam is 74%)
Supplemental Background Material Course (Passing grade for this exam is 74%) Please note that this study guide is a tool for learning the materials you need to effectively study for this examination. As
More informationREINSURANCE OF INSURANCE RISK
May 5 th, 2017 REINSURANCE OF INSURANCE RISK Ing. Jan Hrevuš, Ph.D. Table of Contents o Definition and Purpose o Types of Reinsurance o Reinsurance Program: Example o Subjects on the Market o Renewal Process
More informationGrowth and profit opportunities in P&C R/I. Jürgen Gräber, Member of the Executive Board
Growth and profit opportunities in P&C R/I Jürgen Gräber, Member of the Executive Board 20th International Investors' Day Frankfurt, 19 October 2017 Did you know that... 1 Volume & profitability expectation
More informationReinsurance Structures and Pricing Pro-Rata Treaties. Care Reinsurance Boot Camp Josh Fishman, FCAS, MAAA August 12, 2013
Reinsurance Structures and Pricing Pro-Rata Treaties Care Reinsurance Boot Camp Josh Fishman, FCAS, MAAA August 12, 2013 Motivations for Purchasing Reinsurance 1) Limiting Liability [on specific risks]
More informationIntroduction to Financial Reinsurance. Dieter Kroll Associate Director Hannover Life Re International
Introduction to Financial Reinsurance Dieter Kroll Associate Director Hannover Life Re International 12 th Global Conference of Actuaries Mumbai, 18 th 19 th of February 2010 DISCLAIMER The information
More informationReinsurance (Passing grade for this exam is 74)
Supplemental Background Material NAIC Examiner Project Course CFE 3 (Passing grade for this exam is 74) Please note that this study guide is a tool for learning the materials you need to effectively study
More informationReinsurance 101: an Overview Session 107
Reinsurance 101: an Overview Session 107 Monday, June 9, 2014 1:30pm 3:00pm IASA 86 TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW Introductions Tim Corley Tim is a Senior Solutions Executive for Inpoint
More informationFoundations of Reinsurance
Foundations of Reinsurance Monday, September 23, 2013, 1:30 p.m. Marsha A. Cohen Senior Vice President & Director of Education Reinsurance Association of America Washington, D.C. Marsha A. Cohen is senior
More informationBasic Reinsurance Concepts
Basic Reinsurance Concepts OVERVIEW What is Reinsurance Insurance/Reinsurance Similarities Parties to the Reinsurance Agreement Why Insurers Buy Reinsurance Types of Reinsurance Agreements How Reinsurance
More informationPrinciples of reinsurance
THE CHARTERED INSURANCE INSTITUTE Principles of reinsurance 785 Objective: To develop in the candidate: a knowledge and understanding of the principles of reinsurance and their general application to the
More informationRating and Ratemaking
Rating and Ratemaking Ratemaking refers to the pricing of insurance and the calculation of insurance premiums A rate is the price per unit of insurance An exposure unit is the unit of measurement used
More informationThe Reinsurance Placement Cycle
Session 507 Tuesday, June 10, 2014 1:45pm 3:15pm IASA 86 TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW Overview This will be an interactive session describing the placement of a reinsurance program
More informationThe Reinsurance Placement Cycle
The Reinsurance Placement Cycle Session 507 Tuesday, June 9, 2015 1:30pm Overview Interactive session among four parties: Insurance Company Reinsurance Company Reinsurance Broker Audience Panel Members
More informationInsurance Linked Securities Chris Parry Aon Benfield Solutions
Insurance Linked Securities Chris Parry, Aon Benfield Solutions Luca Albertini, Leadenhall Capital Partners Marco Silva, SCOR Charlotte Acton, RMS Insurance Linked Securities Chris Parry Aon Benfield Solutions
More informationReinsurance Optimization The Theoretical and Practical Aspects Subhash Chandra Aon Benfield
1 st Capacity Building Seminar Reinsurance Optimization The Theoretical and Practical Aspects Subhash Chandra Aon Benfield Indian Actuarial Profession Serving the Cause of Public Interest 9 th August 2014
More informationCaptives and the Management of Risk Table of Contents
Captives and the Management of Risk Table of Contents Captives and the Management of Risk (3rd ed.) Preface o Acknowledgement o About the Author o Frequently Asked Questions (CAPFAQs) Addressed in this
More informationTechnical Provisions in Reinsurance: The Actuarial Perspective
Technical Provisions in Reinsurance: The Actuarial Perspective IAIS Reinsurance Subcommittee Copenhagen May 30, 2002 Presented by Dr. Hans Peter Boller, Converium Ltd (Switzerland) on behalf of the International
More informationUsing Reinsurance to Optimise the Solvency Position in an Insurance Company
Using Reinsurance to Optimise the Solvency Position in an Insurance Company Philippe Maeder, Head of Pricing Life & Health for Latin America Table of Contents / Agenda Solvency Framework Impact of Reinsurance
More informationCopyright 2015 The Ins4tutes
ARM 56 Review CAD004 Speaker: Michael Elliott, CPCU, AIAF, The Institutes Learning Objectives At the end of this session, you will: Dissect the most challenging ARM 56 course topics. Practice ARM 56 exam
More informationEnergy Insurance Mutual Limited. Audited Financial Statements. Years ended December 31, 2017 and 2016 with Report of Independent Auditors
Audited Financial Statements Years ended December 31, 2017 and 2016 with Report of Independent Auditors Audited Financial Statements Years ended December 31, 2017 and 2016 Contents Report of Independent
More informationActuarial versus Financial Engineering
FINANCIAL RISK MANAGEMENT Actuarial versus Financial Engineering CAE Fall 2008 Meeting 17 November 2008 Frank Cuypers ADVISORY Performance, Risk and Capital performance 1 Value creator 2 Value destroyer
More informationInsurance-Linked Securities in the life industry
Insurance-Linked Securities in the life industry by Scott Mitchell, Kevin Manning & Eamonn Phelan October 2017 Introduction Over the past decade, Insurance-Linked Securities ( ILS ) have become an integral
More informationP U B L I S H E D A R T I C L E S
Written By: Darin Benck Published In: SOFE, Spring 2016 P U B L I S H E D A R T I C L E S By Darin Benck, CFE, CPA, CIA, RHU, CRMA Director, Financial Examinations, Risk and Regulatory Consulting Catastrophe
More informationCatastrophe Portfolio Management
Catastrophe Portfolio Management CARE Seminar 2011 Mindy Spry 2 1 Contents 1 Utilize Model Output for Risk Selection 2 Portfolio Management and Optimization 3 Portfolio Rate Comparison 3 Contents 1 Utilize
More informationSwiss Reinsurance Company Consolidated 2012 Annual Report
Swiss Reinsurance Company Consolidated 2012 Annual Report Financial statements Content 02 Group financial statements 02 Income statement 03 Statement of comprehensive income 04 Balance sheet 06 Statement
More informationStructured Reinsurance: Capital Financing for Health Insurance
HIGHLIGHTS Structured reinsurance provides access to capital with a number of advantages over traditional capital financing sources: Access to capital under flexible terms, without the impacts of leverage
More informationAssessing the Impact of Reinsurance on Insurers Solvency under Different Regulatory Regimes
Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Working Paper 70136 Assessing the Impact of Reinsurance on Insurers Solvency under Different
More informationRisk Management in Insurance
University of Cologne Department of Risk Management and Insurance Risk Management in Insurance Value and risk based management with special consideration of Solvency II Salzburg University April / Friday,
More informationP&C Reinsurance Pricing 101 Ohio Chapter IASA. Prepared by Aon Benfield Inpoint Operations
P&C Reinsurance Pricing 101 Ohio Chapter IASA Prepared by Aon Benfield Inpoint Operations Agenda Focus on Treaty, P&C Reinsurance Certain concepts apply to Facultative and/or LYH Reinsurance Pro-Rata Reinsurance
More informationSwiss Reinsurance Company Consolidated Annual Report 2018
Swiss Reinsurance Company Consolidated Annual Report 2018 Contents Group financial statements 2 Income statement 2 Statement of comprehensive income 3 Balance sheet 6 Statement of shareholder s equity
More informationOverview on ILS; NatCat exposure. Juergen Graeber, Member of the Executive Board/COO non-life
Juergen Graeber, Member of the Executive Board/COO non-life 16th International Investors' Day Frankfurt, 23 October 2013 ILS: More than simply catastrophe bonds Transfer of risks to capital markets Insurance
More informationCAN INSURERS PAY FOR THE BIG ONE? MEASURING THE CAPACITY OF AN INSURANCE MARKET TO RESPOND TO CATASTROPHIC LOSSES
CAN INSURERS PAY FOR THE BIG ONE? MEASURING THE CAPACITY OF AN INSURANCE MARKET TO RESPOND TO CATASTROPHIC LOSSES J. David Cummins and Neil A. Doherty The Wharton School University of Pennsylvania INTRODUCTION
More informationHe holds the Chartered Property Casualty Underwriter and Associate in Reinsurance designations.
Reinsurance Overview Tuesday, May 9, 2017, 1:00 p.m. Gary Myers, CPCU, ARe Lost Woods Re, LLC Centralia, Mo. Gary Myers is a familiar figure to many in the property/casualty insurance industry. Starting
More informationContents. Swiss Re 2017 Financial Report 181
Contents Group financial statements 182 Income statement 182 Statement of comprehensive income 183 Balance sheet 184 Statement of shareholders equity 186 Statement of cash flows 188 Notes to the Group
More informationReinsurance Contracts: Clause and Effect
Reinsurance Contracts: Clause and Effect Session #607 Panel Members Pat Larsen, CPCU, ARe Vice President, Ceded Reinsurance/Account Executive American Agricultural Insurance Company Paul Poston, CPCU,
More informationExcess Reinsurance is a coverage purchased by insurance carriers to limit loss in a year
Excess Medical Reinsurance Treaty Considerations By Daniel Wolak Excess Reinsurance is a coverage purchased by insurance carriers to limit loss in a year from any one claim. This article addresses the
More information128 Swiss Re 2013 Financial Report
128 Swiss Re 2013 Financial Report financial statements Introduction Financial statements 130 Group financial statements 130 income statement 131 statement of comprehensive income 132 Balance sheet 134
More informationTrustmark Insurance Company Year Ended December 31, 2016
Trustmark Insurance Company Year Ended December 31, 2016 Management s Discussion & Analysis (MD&A) presents management s view of the financial position and results of operations of Trustmark Insurance
More informationINSURANCE AUSTRALIA GROUP LIMITED ( IAG ) PRESENTATION BY HEAD OF REINSURANCE TO INVESTORS
Insurance Australia Group Limited 388 George Street Sydney NSW 2000 Telephone 02 9292 9222 iag.com.au 6 May 2005 Manager, Company Announcements Office Australian Stock Exchange Limited Level 4, Exchange
More informationAXIS Capital. Keefe, Bruyette and Woods 2009 Insurance Conference New York, NY. David Greenfield, CFO
AXIS Capital Keefe, Bruyette and Woods 2009 Insurance Conference New York, NY David Greenfield, CFO Safe Harbor Disclosure Cautionary Statement Regarding Forward-looking Statements Statements in this presentation
More informationCaptive Primer An Introduction to Captive Insurance
Captive Primer An Introduction to Captive Insurance This Captive Primer is designed as an introduction to captives to inform those looking to for an introduction to and basic understanding of captives.
More informationNorfolk Mutual Insurance Company. Financial Statements December 31, 2016
Financial Statements December 31, 2016 Index to Financial Statements December 31, 2016 MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING 1 Page INDEPENDENT AUDITORS' REPORT 2 FINANCIAL STATEMENTS Statement
More informationThe objectives of the chapter are to provide an understanding of:
Insurance Companies The objectives of the chapter are to provide an understanding of: o o o o o o Why individuals buy insurance. The regulatory issues affecting insurance and the accounting system insurance
More informationReinsurance to Captive
Reinsurance to Captive Helping captives manage their risks geb.com 2 GEB - Reinsurance to Captive What is a captive? Reinsurance to Captive - GEB 3 Captive Company Multinational Head Office Retrocession
More informationSelective Insurance Group, Inc.
Selective Insurance Group, Inc. 2 nd Quarter Investor Presentation Current as of April 30, 2015 Forward Looking Statements Certain statements in this report, including information incorporated by reference,
More informationSwiss Reinsurance Company Consolidated Annual Report 2017
Swiss Reinsurance Company Consolidated Annual Report 2017 Contents Group financial statements 2 Income statement 2 Statement of comprehensive income 3 Balance sheet 4 Statement of shareholder s equity
More informationReinsurance Symposium 2016
Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT A Berkshire Hathaway Company Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT Developing a Treaty
More informationSelective Insurance Group, Inc.
Selective Insurance Group, Inc. KBW Insurance Conference September 10, 2015 Forward Looking Statements Certain statements in this report, including information incorporated by reference, are forward-looking
More informationC ONSOLIDATED F INANCIAL S TATEMENTS. Scottish Annuity & Life Insurance Company (Cayman) Ltd.
C ONSOLIDATED F INANCIAL S TATEMENTS Scottish Annuity & Life Insurance Company (Cayman) Ltd. Years ended and 2008 with Report of Independent Auditors Consolidated Financial Statements Years Ended and 2008
More informationSpecial Purpose Reinsurance Vehicles
2 0 1 2 Special Purpose Reinsurance Vehicles Special Purpose Reinsurance Vehicles Contents 1 Preamble 3 1.1 Background 3 1.2 Contract of Indemnification 4 1.3 Types of SPRVs 4 1.4 SPRVs other than companies
More informationAlternative Risk Transfer Mechanisms
Enterprise Risk Management for the Oil Industry Alternative Risk Transfer Mechanisms Julian M. Roberts Aon Capital Markets Ltd Mexico, November 5, 2002 Contents Alternative Risk Management A broader perspective
More informationStarr Insurance & Reinsurance Limited and Subsidiaries
Starr Insurance & Reinsurance Limited and Subsidiaries Consolidated Financial Statements Table of Contents Page Independent Auditors Report 1 Financial Statements Consolidated Balance Sheet 3 Consolidated
More informationGUIDANCE NOTE FOR LICENSED INSURERS ON REINSURANCE AND OTHER FORMS OF RISK TRANSFER
GUIDANCE NOTE FOR LICENSED INSURERS ON REINSURANCE AND OTHER FORMS OF RISK TRANSFER 1. Introduction The Finance Sector Code of Corporate Governance requires the board of a licensed insurer to set and oversee
More informationOHIO PLAN RISK MANAGEMENT, INC. Columbus, Ohio. FINANCIAL STATEMENTS December 31, 2015 and 2014
OHIO PLAN RISK MANAGEMENT, INC. Columbus, Ohio FINANCIAL STATEMENTS Columbus, Ohio FINANCIAL STATEMENTS CONTENTS INDEPENDENT AUDITOR S REPORT... 1 MANAGEMENT S DISCUSSION AND ANALYSIS (UNAUDITED)... 3
More informationSELECTIVE INSURANCE GROUP, INC.
PAGE 1 SELECTIVE INSURANCE GROUP, INC. 2019 CREDIT SUISSE FINANCIAL SERVICES FORUM BANK OF AMERICA MERRILL LYNCH 2019 INSURANCE CONFERENCE F E B R U A RY 1 4, 2019 PAGE 2 SAFE HARBOR STATEMENT In this
More informationEducational Note. Discounting. Committee on Property and Casualty Insurance Financial Reporting. November Document
Educational Note Discounting Committee on Property and Casualty Insurance Financial Reporting November 2010 Document 210079 Ce document est disponible en français 2010 Canadian Institute of Actuaries Members
More informationKompania e Sigurimeve Illyria Sh.a. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 WITH INDEPENDENT AUDITORS REPORT THEREON
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 WITH INDEPENDENT AUDITORS REPORT THEREON Contents Page Independent Auditor s Report Statement of financial position 1 Statement of comprehensive
More informationSPORTING ACTIVITIES INSURANCE LIMITED. Financial Statements (With Auditor s Report Thereon) Years Ended November 30, 2017 and 2016
Financial Statements (With Auditor s Report Thereon) Years Ended kpmg KPMG Audit Limited Crown House 4 Par-la-Ville Road Hamilton HM 08 Bermuda Mailing Address: P.O. Box HM 906 Hamilton HM DX Bermuda Telephone
More informationReinsurance to Captive
Reinsurance to Captive Helping captives manage their risks geb.com 2 GEB - Reinsurance to Captive What is a captive? Reinsurance to Captive - GEB 3 Captive Company Multinational Head Office Retrocession
More informationIAA Risk Book Chapter 7 - Intra-Group Reinsurance Transactions 2013 Reinsurance Subcommittee of the Insurance Regulation Committee
1. Executive Summary IAA Risk Book Chapter 7 - Intra-Group Reinsurance Transactions 2013 Reinsurance Subcommittee of the Insurance Regulation Committee Intra-Group Reinsurance Transactions (commonly known
More informationTechnical Specification on the Long Term Guarantee Assessment (Part I)
EIOPA-DOC-13/061 28 January 2013 Technical Specification on the Long Term Guarantee Assessment (Part I) This document contains part I of the technical specifications for the long-term guarantees assessment
More informationGlossary of Risk Management And Insurance Terms
Glossary of Risk Management And Insurance Terms - 2 - Glossary of Terms ~ A ~ Act of God A natural event which causes property damage such as a hurricane, earthquake, or flood. Actual cash value The value
More informationStarr Insurance & Reinsurance Limited and Subsidiaries
Starr Insurance & Reinsurance Limited and Subsidiaries Financial Statements Table of Contents Page Independent Auditors Report 1 Financial Statements Consolidated Balance Sheet 3 Consolidated Statement
More informationExpense Calculation Workshop. Who Gets the Money?
Expense Calculation Workshop Who Gets the Money? July 17, 2018 Exercises and Contract Language Who Gets the Money Exercises Index I. Expense Calculation Formula Page 3 II. Exercise # 1 Pages 4-5 III. Exercise
More informationInsurance Linked Securities Report. Executive Summary
CEIOPS-DOC-17/09 June 2009 Insurance Linked Securities Report Executive Summary Securitisation and the originate-to-distribute' model in banking had been identified as a major cause of the current financial
More informationSelective Insurance Group, Inc.
Selective Insurance Group, Inc. 2 nd Quarter Investor Presentation Current as of May 27, 2014 Certain statements in this report, including information incorporated by reference, are forward-looking statements
More informationHurricane Andrew (1992) Photo credit: FEMA
Hurricane Andrew (1992) Photo credit: FEMA 20% 18% 17.75% Florida Citizens CAT Bonds Attachment (Default) Probability Coupon 16% 14% 12% 10% 10.00% 8% 7.50% 6% 4% 2.71% 2.91% 2.89% 2% 0% Series 2012 Series
More informationGuidelines on application of outwards reinsurance arrangements to the nonlife underwriting risk submodule
EIOPABoS14/173 Guidelines on application of outwards reinsurance arrangements to the nonlife underwriting risk submodule EIOPA Westhafen Tower, Westhafenplatz 1 60327 Frankfurt Germany Tel. + 49 6995111920;
More informationWESTERN SUMMIT LLC. Glossary
WESTERN SUMMIT LLC Glossary A Absolute Liability Liability regardless of fault. Adjudication The act of determining an issue or settling a dispute in court. Admitted Assets See Assets. Allocated Loss Adjustment
More informationConference Call on Q1/2018 results
Conference Call on Q1/2018 results Hannover, 7 May 2018 Favourable start to 2018 EBIT increase of +8.5% outperforms NPE growth GWP 4,547 in m. NPE in m. EBIT in m. Group net income in m. 5,345 +17.6% 3,738
More informationFinancial Statements For the Year Ended December 31, 2018
Financial Statements For the Year Ended Financial Statements For the year ended Table of Contents Page Independent Auditor's Report 2 Statement of Financial Position 4 Statement of Comprehensive Income
More informationBRITISH CAYMANIAN INSURANCE COMPANY LIMITED. Financial Statements (With Independent Auditor s Report Thereon) Year ended December 31, 2013
Financial Statements (With Independent Auditor s Report Thereon) Year ended INDEPENDENT AUDITOR S REPORT To the Board of Directors on behalf of British Caymanian Insurance Company Limited We have audited
More informationFinancial Reinsurance Proven concepts in a changing world
w w w. I C A 2 0 1 4. o r g Financial Reinsurance Proven concepts in a changing world Florian Boecker - PartnerRe Disclaimer The following presentation is for general information, education and discussion
More informationSwiss Reinsurance Company Consolidated 2015 Annual Report
Swiss Reinsurance Company Consolidated 2015 Annual Report Contents Group financial statements 2 Income statement 2 Statement of comprehensive income 3 Balance sheet 4 Statement of shareholder s equity
More informationUBS Swiss Equity Conference
Stefan Lippe Chief Executive Officer Agenda Company profile Building on our strengths Outlook Questions & answers Slide 2 Headquarters Zurich, Switzerland Swiss Re A leading and highly diversified risk
More informationTopic: Accounting for Reinsurance: Questions and Answers about FASB Statement No Revised: December 1998; September 1999; September 2001 *
Topic No. D-34 Topic: Accounting for Reinsurance: Questions and Answers about FASB Statement No. 113 Date Discussed: July 22, 1993 Revised: December 1998; September 1999; September 2001 * The Task Force
More informationTechnical Specification for the Preparatory Phase (Part I)
EIOPA-14/209 30 April 2014 Technical Specification for the Preparatory Phase (Part I) This document contains part I of the technical specifications for the preparatory phase. It needs to be applied in
More informationOHIO PLAN RISK MANAGEMENT, INC. Columbus, Ohio. FINANCIAL STATEMENTS December 31, 2016 and 2015
OHIO PLAN RISK MANAGEMENT, INC. Columbus, Ohio FINANCIAL STATEMENTS Columbus, Ohio FINANCIAL STATEMENTS CONTENTS INDEPENDENT AUDITOR S REPORT... 1 MANAGEMENT S DISCUSSION AND ANALYSIS (UNAUDITED)... 3
More informationAudit ed Financial Statements Cont d
Audit ed Financial Statements Cont d Notes to the Financial Statements 2. Significant Accounting Policies (Continued) (i) Intangible assets Acquired computer software licenses are capitalised on the basis
More informationPanel 4: Role of insurers, reinsurers and technical assistance providers
Microinsurance Conference 2005 Making Insurance Work for the Poor: Current Practices and Lessons Learnt Panel 4: Role of insurers, reinsurers and technical assistance providers David M. Dror, PhD, DBA
More informationUnited of Omaha Life Insurance Company A Wholly Owned Subsidiary of (Mutual of Omaha Insurance Company)
UNITED OF OMAHA LIFE INSURANCE COMPANY *69868201722000100* Audited Financial Report United of Omaha Life Insurance Company A Wholly Owned Subsidiary of (Mutual of Omaha Insurance Company) Statutory Financial
More informationACTIVE CAPITAL REINSURANCE, LTD.
Financial Statements ACTIVE CAPITAL REINSURANCE, LTD. For the Year Ended December 31, Contents December 31, Page Independent auditors report 1 to 2 Statement of financial position 3 Statement of comprehensive
More informationFBR Fall Capital Markets Investor Conference. December 2, 2009
FBR Fall Capital Markets Investor Conference December 2, 2009 Forward Looking Statements This presentation contains forward-looking statements which are made pursuant to the safe harbor provisions of the
More informationNew asset class? Numerous insurance and reinsurance companies
Kenneth Pierce, Clifford Schoenberg and Brian O Sullivan of Mayer Brown 1 take a look at insurance runoff risk and find it to be an asset class ripe for securitisation New asset class? Numerous insurance
More informationProperty & Casualty Insurance CFO Survey. The Current Market. Property Significantly harder. Somewhat harder. About the same.
Insights March 2 Property & Casualty Insurance CFO Survey Trends in Reinsurance and Alternative Forms of Capital As the market for insurance-linked securities and other alternative forms of capital has
More informationRisk Transfer Accounting. Casualty Loss Reserve Seminar
Risk Transfer Accounting Casualty Loss Reserve Seminar Reinsurance Accounting Guidance GAAP Statutory FASB Statement No. 113, Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration
More informationChapter Six Problems of Life Assurance
Chapter Six Problems of Life Assurance 6/1 Preface 6/2 Problems of long term savings 6/3 The life insurance method for long term savings 6/4 Fixed pound investments and inflation 6/5 The inflation peril
More information1 Jan 2018 Property & Casualty Treaty Renewals. and guidance update 2017 and 2018
Property & Casualty Treaty Renewals and guidance update 2017 and 2018 Renewals Conference Call Hannover, 7 February 2018 Reinsurance markets Our results Our portfolio Structured reinsurance Outlook 2018
More informationSecuritisations for Life Insurers
Securitisations for Life Insurers Overview and opportunities Wolfgang Hoffmann 22. October 2013 Agenda Introduction VIF Monetisation / Securitisation Structuring of transactions Key Impact impacts on KPIs
More informationReinsurance Loss Reserving Patrik, G. S. pp
Section Description Reinsurance Loss Reserving 1 Reinsurance Loss Reserving Problems 2 Components of a Reinsurer s Loss Reserve 3 Steps in Reinsurance Loss Reserving Methodology 4 Methods for Short, Medium
More informationOnshore Special Purpose Reinsurance Vehicles: A Public Policy Evaluation
Onshore Special Purpose Reinsurance Vehicles: A Public Policy Evaluation June 9, 2000 Robert W. Klein Martin F. Grace Richard D. Phillips Center for Risk Management and Insurance Research Georgia State
More informationLa Capitale Civil Service Mutual
Consolidated Annual Financial Report TABLE OF CONTENTS Responsibility for Consolidated Financial Statements 1 Auditors Report 2 Consolidated Financial Statements Balance Sheet 3 and 4 Statement of Income
More informationActuaries Club of the Southwest
Actuaries Club of the Southwest Securitization of Life Insurance Jonathan Hecht, FSA, MAAA June 17, 2004 Agenda Overview of Life Insurance Securitization Securitization Examples Actuaries Role 1 Agenda
More informationGuernsey spis - private collateralised
Guernsey spis - private collateralised A fund manager may be appointed by the fund and retains fiduciary responsibility for the investors money. A fund administrator is also appointed. Trustees are appointed
More informationREINSURANCE ESCAPING FROM THE BEARS. Financial Services
Financial Services REINSURANCE ESCAPING FROM THE BEARS AUTHORS Arthur White, Partner Christopher Sandilands, Senior Manager Jonathan Hekster, Senior Manager BEARING DOWN Reinsurers face a persistent and
More informationSwiss Reinsurance Company Consolidated 2014 Annual Report
Swiss Reinsurance Company Consolidated 2014 Annual Report Content Group financial statements 4 Income statement 4 Statement of comprehensive 5 income Balance sheet 6 Statement of shareholder s equity
More informationHoward Mutual Insurance Company Financial Statements For the year ended December 31, 2017
Financial Statements For the year ended Financial Statements For the year ended Table of Contents Page Independent Auditor's Report 2 Statement of Financial Position 3 Statement of Comprehensive Income
More information