Reinsurance

Insurers Ready for Above-Average Hurricane Season

Posted on April 08th, 2010 in Aon, AonCorp, AonCorporation, catastrophe insurance, chile earthquake, Colorado State University, hurricane, Hurricane season, India Shares, insurance, insurance companies, Reinsurance, reinsurance industry

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All we can do is wait for Alex.

Hurricane season start June 1, 2010, with Alex chosen as the first name, and it’s expected to be above average. The Colorado State University forecast released on Wednesday predicts 15 named storms in the Atlantic basin, due partly to record warm water. Eight of them are expected to reach hurricane status, with sustained winds of 74 mph, and four are forecasted to become Category 3, 4 or 5 storms, with sustained winds of 111 mph. Typically, there are only 10 named storms, with six becoming hurricanes (two of them major), based on data going back to 1950.

William Gray, a member of the CSU Tropical Meteorology Project, told USA Today, “The probability of a major hurricane making landfall along the U.S. coastline is 69%, compared with the last-century average of 52%.”

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Insurers Ready for Above-Average Hurricane Season originally appeared on BloggingStocks on Thu, 08 Apr 2010 15:40:00 EST. Please see our terms for use of feeds.

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State Farm Closes First Cat Bond of Q2

Posted on April 02nd, 2010 in Aon, aon corp, AonCorporation, catastrophe, catastrophe insurance, catastrophes, catastrophic insurance, earthquake, earthquake insurance, India Shares, insurance, insurance industry, inthenews, Reinsurance, reinsurance industry, state farm, State Farm Insurance

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The first catastrophe bond of the quarter closed on opening day … and it was a big one. State Farm’s Merna Re II transaction was good for $350 million in risk capital, upsized from the earlier reported amount of $250 million. Though large, it doesn’t compare to the previous Merna Re catastrophe bond, which set a record at $1.2 billion that remains to be beat.

Merna Re II was oversubscribed, but State Farm only wanted to place $350 million, Thomson Reuters reports (registration required). According to one investor who knew about the transaction, “The deal was oversubscribed at +365 basis points and after being upsized to $350 million.” The investor added, “The initial price talk was 365 – 405 bp, but the deal got priced at 365 bp. However, Merna was a simple transaction and State Farm only wanted to place 350 million.”

Continue reading State Farm Closes First Cat Bond of Q2

State Farm Closes First Cat Bond of Q2 originally appeared on BloggingStocks on Fri, 02 Apr 2010 12:40:00 EST. Please see our terms for use of feeds.

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Aon Reports Flat Reinsurance Pricing, No Surprises

Posted on April 02nd, 2010 in Aon, AonCorp, AonCorporation, catastrophe, catastrophe insurance, catastrophes, catastrophic insurance, India Shares, inthenews, marsh and mclennan, MMC, Reinsurance, reinsurance industry, Willis, wsh

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Like Willis Re (WSH) and Marsh & McLennan’s (MMC) Guy Carpenter, reinsurance broker Aon Benfield (AOC) found risk-transfer pricing to have softened at the April 1, 2010 reinsurance renewal. It was the same story around the world: the Q1 catastrophes may do some damage to earnings, but the sector was sufficiently capitalized to absorb the shocks. In fact, Aon Benfield reported that the reinsurance industry had nearly returned to record capital levels. At the beginning 2008, the sector was in the same situation before the financial crisis and Hurricane Gustav and Ike depleted balance sheets on the same weekend in September.

According to Aon Benfield, risk-adjusted price reductions of 0% to 5% were sustained in the Japanese property-catastrophe market, with capacity remaining stable. In the U.S., risk-adjusted pricing dropped 5% to 15%, a range consistent with the January 1, 2010 renewal. UK property-catastrophe rates slid at the most recent renewal, as well.

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Aon Reports Flat Reinsurance Pricing, No Surprises originally appeared on BloggingStocks on Fri, 02 Apr 2010 09:15:00 EST. Please see our terms for use of feeds.

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Q1 Catastrophes May Hit Earnings, Won’t Change Market

Posted on April 01st, 2010 in chile earthquake, earthquake, earthquake insurance, earthquakes, India Shares, insurance, insurance companies, insurance industry, inthenews, marsh and mclennan, MMC, Reinsurance, reinsurance industry, Willis

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The first quarter of 2010 will probably go down in history as the worst ever for catastrophe losses.

According to global reinsurance broker Willis Re (WSH), the insurance industry recorded $16 billion in insured losses, from the Chile earthquake and Windstorm Xynthia in Europe, but the largest losses occurred in smaller markets, where it premium volumes aren’t as large. Since the third and fourth quarters tend to be the most loss-prone of the year, a quarter that is normally quiet could set the stage for outsized losses.

Continue reading Q1 Catastrophes May Hit Earnings, Won’t Change Market

Q1 Catastrophes May Hit Earnings, Won’t Change Market originally appeared on BloggingStocks on Thu, 01 Apr 2010 14:20:00 EST. Please see our terms for use of feeds.

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