Risk Modeling Lessons of the Financial Crisis

Contributor: Dom Tobey, Deputy Head Global Specialty Lines, PartnerRe
Date: 8/31/2009
When one considers the role that risk modeling played in the roots of the financial crisis, there were very clearly a number of common technical flaws in the models. However, the way the models were used and managed played a far more important role than the technical problems themselves. While these issues centered around investment banking activities, the broad lessons learned are equally applicable to insurance and reinsurance.
Tags: Non-specific, Risk management & reserving, Capital markets & structured products, Claims, Pricing & models

When Risk Management Systems Fail

Contributor: Patrick Thiele President & CEO
Date: 12/1/2007
As we progress through the fourth quarter, we continue to hear bad news in the financial sector. The sub-prime debacle and subsequent credit crisis continues to impact the financial and re/insurance sectors. The issue has accelerated in the fourth quarter with ongoing volatility and reductions in liquidity for any kind of sub-prime asset. Stocks directly or indirectly related to the crisis are also dropping. And unfortunately, there is likely more to come.
Tags: Non-specific, Risk management & reserving, Capital markets & structured products, CEO commentary

A New Product Era

Contributor: Brian Tobben, SVP, New Solutions, PartnerRe
Date: 10/1/2007
As the line blurs between the capital and reinsurance markets, a new product era is upon us and reinsurers are becoming increasingly ­flexible in the way that they assume risk for their cedants. Given the similarities between these markets, there are identifiable aspects of risk assumption that will strongly influence how the new products shape up medium term.
Tags: Non-specific, Capital markets & structured products

Sub-prime Parallels

Contributor: Patrick Thiele President & CEO
Date: 10/1/2007
The U.S. and world financial systems are experiencing a ’shock loss’, characterized in the re/insurance industry as a loss event that can lead to substantial financial difficulty. This initially arose out of the sub-prime mortgage asset class, but soon spread to other asset-backed securities. Billions of dollars of investors’ money is disappearing in a wave of defaults and additional billions of dollars worth of securities will be ‘marked to market’. No one currently knows the extent or the magnitude of the problem.
Tags: Non-specific, Risk management & reserving, Capital markets & structured products

When Change is Afoot

Contributor: Patrick Thiele President & CEO
Date: 4/1/2007
The January 1, 2007 non-life renewal results are in. Despite a good portion of premiums leaving the reinsurance market, the renewal was orderly, with a reasonable level of competition. But on January 2, substantial change was afoot. 2006 proved to be a record year ...
Tags: Non-specific, Risk management & reserving, Capital markets & structured products, Regulation, CEO commentary