A new wrinkle in IBNR

Behind its firewall, SNL writes about reinsurers establishing cat IBNR reserves that aren’t tied to an event: Typically, reinsurers establish IBNR reserves to cover future payments on individual losses that have occurred but have yet to be reported or reported losses that have not been recorded in full. Unallocated IBNR reserves are a slightly different [...]

GuyCarp: Reinsurance renewals

I have nothing to add to this: Words here.

Aon: Reinsurer capital grew a sliver in Q2, down for the year

Highlights from the first half study of the the 28 large insurers that make up the Aon Benfield Aggregate: Global reinsurer capital totaled US$445B at June 30. That’s 5% less than at year-end but 1% higher than at Q1.That number includes shareholder funds and non-traditional forms of capital. Shareholders funds fell 1.7% in the first [...]

Brokers’ halftime reports

In a sentence: The market has done just about everything necessary to turn, except turn. A lot about market uncertainty in these reports, which always turns me off. What, after all, is certain? Beyond that, it’s clear that everyone believes a big blow will drive rates up. But there’s not a lot of confidence about [...]

Citizens Property and investment income

Actuarial Outpost has picked up my post about how Florida’s state HO insurer, Citizens Property, can’t remain solvent through a substantial storm. The very sensible Outpost question  – what about the investment income? Unfortunately, as this snip from the 2011 budget (around page 12 of this pdf) shows, Citizens posts net investment losses: That line [...]

On rates: What will turn the market?

Moody’s agrees with other reports: Rates on Jan. 1 renewals of the reinsurance market are down between 5% and 10%. So the story is both depressing (from a reinsurer’s POV) and monotonous (from a blogger/journalist’s POV). So, a couple of twists: Moody’s also doubts that the new version of the catastrophic model RMS will turn [...]

Chart of the Day: Reinsurer values

Guy Carpenter’s COTD shows the price-to-book ratio for global reinsurers is at a 20-year low: Price-to-book, for the non-investor, is the ratio of stock price per share to book value (which is basically surplus) per share. A price-to-book of less than 1.0 implies that the market thinks the value of the firm is less than [...]

The best of Monte Carlo

Though lacking veracity, Steve Grabber’s reports on Monte Carlo for Reactions magazine are spot on. Sample: To: Traceygrabber@fishnets.comFrom: stevegrabber@megabroker.co.ukSubject: Monty T18:00 Would you believe it I have managed to crash a party on an actual yacht just outside the actual marina. It has been chartered by Voidoids, the run-off company. OK it could sink at [...]

Yeah, surre.

Some Monte Carlo magic: MONACO, Sept 14 – Swiss Re will continue to focus on the most profitable business even as prices fall and has no lower limit for the amount of cover it writes, the world’s second-biggest reinsurer’s chief underwriting officer told Reuters. Munich and Scor said the same thing a couple of days [...]

Monte Carlo games

Via Reuters, here are highlights of the reinsurance Rendez-Vous in Monte Carlo: Reinsurers say they will remain disciplined, meaning they won’t keep lowering rates. Brokers are skeptical. The industry has $13 billion more in capital than it needs, which is what is driving rates lower. (Remember reinsurers rent their capital. If there’s too much capital, [...]