Trading risk: The value of relationships, models and face-to-face interaction in a global reinsurance market

Author(s):

Paula Jarzabkowski

 et al.

Over the past 20 years, the reinsurance industry has experienced three profound forces for change. First, technological change has improved information distribution and strengthened connections between global markets. Second, regulatory emphasis on global equivalence in trading practices has generated pressure for convergence across different marketplaces. Third, the widespread acceptance of vendor property catastrophe models has led to more standardised approaches to the evaluation of reinsurance risks, levelling the playing field for decision-making on at least some classes of business. However, there has been little systematic evaluation of the specific implications of change for either trading practices or for future industry evolution. This report addresses that gap by presenting the results of an industry-commissioned, year-long study of reinsurance underwriting and broking practices in the Lloyd's and Bermuda marketplaces.

Updated: 26/06/2013
Comments:
Views: 5,793

Beyond borders: Charting the changing global reinsurance landscape

Author(s):

Paula Jarzabkowski

 et al.

This report is the result of a three-year study of the global reinsurance industry, covering the main stakeholders of cedents, reinsurers, and brokers. It examines the implications of profound change arising from shifts in regulation, consolidation in the key players, and increasing competition both within the reinsurance industry and from alternative capital providers.

Updated: 11/06/2013
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Views: 6,606

Global Reinsurance Masterclass series: 3. Winning the game

Reinsurance providers have typically avoided head-to-head competition by occupying different strategic positions, according to their different perspectives on what constitutes attractive business. However, industry evolution is generating greater rivalry that is eroding some of these distinctions and driving reinsurers towards new strategic positions. This masterclass identifies these strategic groups and analyses the moves reinsurance companies can take to prosper.

Updated: 10/03/2016
Comments:
Views: 7,933

Global Reinsurance Masterclass series: 2. Fit for purpose?

The reinsurance industry is a secondary industry. It exists to serve the needs of a primary insurance industry: so trends in insurance are likely to change the kinds of products which insurance companies need from reinsurers. This Masterclass focuses on the buyers of reinsurance - the primary insurers, whose world is rapidly changing - and shows how reinsurers need to position themselves to continue

to attract insurers' premium.

Updated: 15/10/2013
Comments:
Views: 10,124

Global Reinsurance Masterclass series: 1. Re-think reinsurance

At the end of 2009 the reinsurance industry was a confident and optimistic one. A succession of major natural disasters during 2010, however, rocked the industry and since then both competition and regulation have intensified. In this first masterclass of a series of seven, we analyse the current state of the reinsurance industry and suggest strategic responses to the current competitive climate.

Updated: 15/10/2013
Comments:
Views: 5,677

Double Chain Ladder, Claims Development Inflation and Zero Claims

Our previous academic research into Double Chain Ladder demonstrated how the classical chain ladder technique can be broken down into separate components. In this paper, we continue our investigation of the double chain ladder, and illustrate a simple way to include prior knowledge of severity inflation and future zero claims into the framework of the model.

Updated: 13/05/2013
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Views: 5,020

Prediction of RBNS and IBNR claims using claim amounts and claim counts

Author(s):

Richard Verrall

 et al.

This paper proposes a stochastic model for loss reserving based on incremental reported claim numbers and paid amounts, and which serves to predict Reported But Not Settled (RBNS) and Incurred But Not Reported (IBNR) claims separately. The paper takes the approach of building a model for aggregate paid claims from basic principles at the level of individual data. The research suggests that the use of the aggregated counts data can improve reserving accuracy.

Updated: 02/05/2013
Comments:
Views: 6,917

Double Chain Ladder

Author(s):

María Miranda

 et al.

This paper presents an extension to the model for forecasting outstanding claims liabilities, formulated by Verrall et al. (2010). The resulting model is closely related to the chain ladder method. So close in fact, it is possible to produce exactly the same results, if a particular choice is made about the way the estimates are obtained. This raises the question of why a new method is necessary. This research puts forward several answers.

Updated: 08/07/2015
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Views: 14,168

Continuous Chain Ladder: Reformulating a classical insurance problem

Author(s):

Jens Nielsen

 et al.

The estimate of outstanding liabilities is of immense importance to non-life insurance companies. The task of estimating this number is frequently left to actuaries. This paper introduces a number of new methodologies and approaches to estimating outstanding liabilities in non-life insurance, and invites greater participation from operational research statisticians in improving research into the matter.

Updated: 10/06/2013
Comments:
Views: 9,938