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Reinsurance purchase delayed by Japanese earthquake
Turmoil in the reinsurance market means that it will be a little longer before
the AIUA, Alabama's coastal insurer of last resort, will figure out how much it will pay this year to pass off some of its risk.
Reinsurance is the biggest part of the pool's budget, and has been a factor driving rate increases in recent years. Last year, the pool spent more than $20 million, or more than 60 percent of its budget, to buy coverage protecting its member insurers from losses in a slot between $100 million and $435 million.
Read Mobile Register reporter Jeff Amy's
complete article
Posted 4/9/2011
Reinsurance Rates Fall Despite 2010 Disasters
WSJ
article
1/4/2011 by ERIK HOLM
NEW YORK—Despite a flurry of natural disasters
in the first half of 2010, reinsurance companies—which sell backup
protection to insurers—charged about 5% to 10% less as they
negotiated new catastrophe coverage that kicked in on Jan. 1,
according to brokers who arrange the coverage.
The roster of last year's catastrophes included earthquakes in
Haiti and Chile, the sinking of the Deepwater Horizon oil rig in the
Gulf of Mexico, and a massive windstorm in Europe. Catastrophes are
often the trigger for reinsurance price increases.
But reports from the leading reinsurance brokers point to the
absence of hurricanes hitting the U.S in 2010 as one reason for the
pricing declines, since the June-to-November hurricane season in the
Atlantic Ocean usually means the second half of the year is more
costly for the insurance industry. The majority of primary
insurers back in their protection against large losses for the
coming year by Jan. 1.
Posted 1/5/2011
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HEDGE FUNDS ENTER REINSURANCE MARKET
From 10/27/2011 Reuters report by Svea Herbst-Bayliss
Steven A. Cohen, who built one of the world's biggest and most successful hedge funds, is branching out and plans to set up his own reinsurance firm, two people familiar with the matter said.
For years, hedge fund managers have been known as big risk takers, but more recently a growing number have also move into underwriting risk.
"We haven't had a lot of new reinsurers launched in the last five years, but that is clearly changing," said Barile, who runs Andrew Barile Consulting Corp Inc.
For hedge funds, this may be a savvy way to raise new money during tough times. Not only are there more hedge funds competing for capital, but investors are becoming stingier, especially now that many hedge funds are nursing heavy losses, industry experts say.
Reinsurance essentially acts as a safety valve for insurance companies in that an insurer pays a reinsurer to cover part of its losses between certain thresholds. The new reinsurer will concentrate on property, where hurricanes and other disasters can cause substantial damage, and on casualty, where the scope of losses may be lower, but they occur more frequently in medical malpractice or workers' compensation claims.
Posted 10/27/2011
Insurance leaders call for federal reinsurance aid
Read article in MPR 4/9/2010
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