Michael Stahel, head Insurance-Linked Investments at Clariden Leu assesses how insurers/reinsurers will likely cope with, on the one hand the significant losses caused by the occurrence of natural catastrophes in New Zealand, Australia, Japan and on the other, the challenges posed in embracing modelling agency, Risk Management Solution’s (RMS) latest version 11. He shares what he believes the remainder of the year might have in store for insurers/reinsurers, policy holders and investors.
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Q1 - Interesting juncture in the insurance/reinsurance industry
In the context of insurers/reinsurers capital requirements
How the Q1 natural catastrophes have impacted their capital base - estimated loss of USD45bn for Q1’11
Consequences of applying the new RMS model for insurers/reinsurers
Q2 - Premium rates are expected to increase
Hardening of insurance/reinsurance markets
The role of the regulators, credit agencies, policy holders
Insurers/Reinsurers will most likely buy additional capacity in 2012
Higher premium rates - end 2011 or in 2012
Q3 - Can you play seasonality?
Why that is very difficult?
Optimising your capital allocation
Invest in the US hurricane season (June-Nov.) followed by European windstorms (Dec.-March), followed by Japan typhoons
The reinsurance cycle
Q4 - How is the secondary market evolving - investor opportunities?