Thailand floods could cost the global insurance industry $10 billion

Devastating floods in Thailand may have a global impact, according to insurers. Thailand is a critical point in the global supply chain, says Gary Lynch, head of supply chain risk at Marsh Risk Consulting. Widespread flooding has closed more than 14,000 businesses, including distribution centers for Sony, Canon and Nissan. The disruption in the supply chain could have far reaching consequences in the U.S., the UK and throughout Europe. Lloyd’s of London is now petitioning Thailand insurance and risk firms to assess the risk exposure they see in the nation.…

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Insurer’s move away from RMS hurricane model amidst controversy

Hurricane risk models were a popular subject for insurers this week during the annual meeting of the Property Casualty Insurers Association of America. Earlier in the year, risk modeling agency Risk Management Solutions (RMS) introduced revisions to its U.S. hurricane model. The changes generated some controversy when they were first announced, but have since become an all-encompassing issue for property insurers in coastal regions. These insurers expressed their discontent for the new model during the meeting, citing multiple factors that have made it more costly to do business in the…

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Coalition for Competitive Insurance Rates oppose new laws for foreign reinsurance companies

Two laws currently before Congress have found opposition from the Coalition for Competitive Insurance Rates, a group of businesses and consumers that rely on low rates stemming from competition in the national insurance market. The legislations in question are H.R. 3157 and S.B. 1693. Both laws impose greater taxes on foreign insurance and reinsurance companies that wish to do business within U.S. borders. The Coalition fears that this will dissuade foreign companies from entering the market, thereby reducing competition and raising insurance prices. Currently, the majority of the reinsurance needed…

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Barclay’s launches new insurance-linked security product for the global insurance industry

 Barclay’s Capital, a worldwide investment bank based in the UK, has launched a new initiative that is aimed at providing the insurance industry with added protections against natural disasters. The financial institution will begin supplying insurance-linked securities that will embolden the insurance industry against catastrophes. The new service will help placate the concerns of investors who are growing leery of the insurance industry’s constant struggle with disastrous storms and other events. Barclay’s believed that the insurance-linked security products will help the industry cope with any financial turbulence it may experience…

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Reinsurance industry may be facing troubling times despite recent victories

After facing uncertain and worrisome times in 2008 and 2009, the global reinsurance industry has been enjoying the relative successes of the past two years. Those two years have made a major difference in the industry as new risk models were released, allowing reinsurers to judge the value of risk more accurately. While the industry is certainly experiencing a time of prosperity, there are a number of factors that are adding to concerns about the future and what can be done to mitigate disasters that may be looming on the…

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