Monday, February 9, 2015

Insurance Market and Risk

What are the Insurance Markets and Risk Trends in this age ?

Risk area to watch
Cat exposed that the property risks including flood zone exposures. Certain segments like; workers' compensation, excess market including lead umbrella in the pharmaceutical, transportation and energy sectors. And also the cyber liability and network security coverage in potential for more restrictive terms and condition following recent losses.  Specialty areas including Energy, Marine and Aviation.

Terrorism insurance options
Insurance company should consider for alternative solutions for terrorism coverage. Like; standalone terrorism placements, Reservation of Capacity, Sunset provision discussion and Captive insurer strategies. Such alternative may be appropriate even if is extended. For example, standalone policies; May provide alternative and supplement to coverage, May provide immediate coverage in the absence of the federal backstop program, Can be reserved for either a short-term or for a full-term renewal or Provide risk professionals with the ability to lock in capacity and pricing now.

Flood Risk
Still no universally accepted modeling approach for flood. Most carriers: Monitor portfolio locations and try to mange by limiting the amount of sub-limit provided. New flood maps being proposed but are not yet played in real market, The Bigger-Waters Flood Insurance Reform Act: Requires the Federal Management  Agency (FEMA) to adjust the way it manages the National Flood Insurance Program, may it contains significant program reforms, Aims to eliminate subsidies and discounts on flood insurance premiums, Means that many organization will face NFIP premium rate increases as a result, Has come under intense fire from critics.

Causality: Umbrella and Excess
Umbrella Market covers overall capacity increased and, rates generally stabilized throughout the year and trend expected to continue into future. Excess market can new insurers entered the marketplace form the different countries, it should likely help to keep excess casualty rate relatively stable. Exceptions may exist in some areas: energy, chemical, life sciences and construction areas!!!!!

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