Insurers of Last Resort: My Word is My Bond

Contributor: Brian Secrett, Chief Underwriting Officer, Catastrophe, PartnerRe; Laura Davis, Head of Catastrophe, Bermuda, PartnerRe
Date: 4/23/2010
An increasing amount of risk is being assumed by U.S. personal lines residual market bodies, particularly in coastal states. We look at TWIA and the uncertainties for re/insurers linked to the new funding structure following last year's legislative change.
Tags: Litigation, Property, Catastrophe perils, U.S.

Canadian Motor Claims Accelerate

Contributor: Angela Chung, Senior Underwriter P&C Canada, PartnerRe; Grace Lin, Chief P&C Pricing Actuary Canada, PartnerRe
Date: 2/1/2010
As we turn the corner into 2010, Ontario’s 1997 CAD $ 700,000 average reported large motor loss now stands at CAD $ 3.2 million; a four-fold increase over 11 years. Given such inflation and the absence of redistributory index-linked clauses, upward non-proportional reinsurance pricing adjustments are essential to avoid a future crash in capacity and healthy balance sheet for all parties.
Tags: Motor, U.S., Pricing & models

A Swinging Pendulum: U.S. Tort Reform

Contributor: Art Gang, SVP, Associate General Counsel, PartnerRe
Date: 10/20/2009
The recent economic downturn and changes in political administrations have led to attempts to roll back tort reforms. We examine the current landscape, and how an encroachment could impact how re/insurers underwrite and assess liability coverage and exposure.
Tags: Litigation, U.S.

U.S. Casualty: Storm Clouds on the Horizon

Contributor: Dick Sanford, EVP and Head of Specialty Casualty, PartnerRe U.S.; David Durbin, SVP and Head of R&D and Risk Modeling, PartnerRe U.S.; Wayne Hommes, EVP and Risk and Capital Management, PartnerRe U.S.; Tom Smith, SVP, and Head of Actuarial Pricing, PartnerRe U.S.
Date: 8/31/2009
Higher capital costs, low interest rates, the looming threat of inflation and the potential rolling back of U.S. tort reforms can be individually problematic for long-tailed casualty lines of business. Collectively their occurrence can be market changing – and not for the better. Indeed, the potential confluence of these factors looks like they’re building up into a potential re/insurance version of “the perfect storm”.
Tags: Property, Casualty, U.S.

A Controlled Flight into Terrain?

Contributor: Benjamin Weber, Head of Aviation, PartnerRe
Date: 12/1/2007
Stringent Limits and cover management, coupled with adequate rating levels, have kept the booming U.S. General Aviation insurance sector flying a strong, steady course for many years. However, due to actual or perceived pressure from new entrants, most General Aviation ­segments are now entering a downward flight trajectory. Restored ­discipline in individual and market underwriting is indispensable to avert potential disaster.
Tags: U.S., Aviation

A Handle on Claims

Contributor: Carol Ann O’Dea, J.D., Senior Vice President and Claims Manager, PartnerRe.
Date: 10/1/2007
On September 11, 2001, terrorists destroyed the World Trade Center (WTC) in a single, coordinated attack involving two planes that struck the WTC’s twin towers within minutes of each other. The WTC site and lease, purchased by Silverstein Properties from the Port Authority of New York and New Jersey for U.S. $3.2 billion in July 2001, was insured under a layered Property insurance program. In the Property program, 24 insurance carriers provided a total coverage of up to U.S. $3.5 billion per “occurrence.” However, as of September 11, with only one exception, actual insurance policies had not been issued – only binders, slips and confirmations of insurance were in place. These contained various wordings, opening the door to critical questions such as: was this one “occurrence” or two; what were the terms governing each of the 24 insurers’ coverage; and, how much were the insurance companies obligated to pay Silverstein Properties?
Tags: Claims, U.S.

Unearthing Construction in the U.S.

Contributor: Maria Amelio, Senior Vice President, U.S. Program Business, PartnerRe
Date: 4/1/2007
Developments in the U.S. construction and contractors’ risk environment continue to make this a difficult class to underwrite. Exposure analysis is complicated by regulatory and contractual issues within both the construction and insurance industries, and by physical changes in the way that construction itself is carried out – in particular with regard to the use of new products and to construction projects in less developed geographical areas.
Tags: Property, U.S.