welcoming remarks - pdfs.semanticscholar.org€¦ · welcoming remarks tom ruggieri ceo, advisen ....

Welcoming Remarks

Tom Ruggieri

CEO, Advisen

Keynote Presentation

Sanjay Godhwani

Property Product Line Executive

Chartis US & Canada

Sanjay Godhwani Property Product Line Executive

Overview of the Property Insurance

Market

The Pricing Cycle

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ADVx Property

ADVx Property

Advisen ADVx™ Price Change Index

The Pricing Cycle ADVx™ Property versus Composite

The Pricing Cycle The Impact of Catastrophes

The Pricing Cycle Capacity: Surplus as % GDP

The Pricing Cycle Surplus as % GDP/Insured Cat Losses

Retentions

Revenue > $250M Source: Advisen

Market Share Revenue > $1 Billion

Source: Advisen

Market Share Revenue $300 Million - $1 Billion

Source: Advisen

Market Share Revenue < $300 Million

Source: Advisen

The Risk Manager’s Perspective

Al Tobin

Managing Principal & National Property Leader

Aon

• Al Tobin, Managing Principal & National Property Leader, Aon

• Lois Fuchs, VP, Risk Management, Honeywell

• James Curtin, VP, Risk Management, Vornado Realty Trust

The Risk Manager’s Perspective

Sponsored Break

Understanding & Managing Tornado Risk

David Bradford

President, Research & Editorial

Advisen

• David Bradford, President, Research & Editorial, Advisen

• David Finnis, National Property Practice Leader, Willis

• Lou Gritzo, Vice President & Manager of Research, FM Global

• Tom Hall, Sr. Risk Engineering Consultant, Natural Hazards, Zurich

Understanding & Managing Tornado Risk

21

FUJITA TORNADO DAMAGE SCALE

SCALE WIND ESTIMATE *** (MPH) TYPICAL DAMAGE

F0 < 73 Light damage. Some damage to chimneys; branches broken off trees; shallow-rooted trees pushed over; sign boards damaged.

F1 73-112 Moderate damage. Peels surface off roofs; mobile homes pushed off foundations or overturned; moving autos blown off roads.

F2 113-157

Considerable damage. Roofs torn off frame houses; mobile homes demolished; boxcars overturned; large trees snapped or uprooted; light-object missiles generated; cars lifted off ground.

F3 158-206

Severe damage. Roofs and some walls torn off well-constructed houses; trains overturned; most trees in forest uprooted; heavy cars lifted off the ground and thrown.

F4 207-260

Devastating damage. Well-constructed houses leveled; structures with weak foundations blown away some distance; cars thrown and large missiles generated.

F5 261-318

Incredible damage. Strong frame houses leveled off foundations and swept away; automobile-sized missiles fly through the air in excess of 100 meters (109 yds); trees debarked; incredible phenomena will occur.

Developed in 1971 by T. Theodore Fujita of the University of Chicago) Source: NOAA.Gov

Measuring Ferocity

http://www.spc.noaa.gov/faq/tornado/f0.htm






22

Enhanced Fujita – February 1, 2007

FUJITA SCALE DERIVED EF SCALE OPERATIONAL EF SCALE

F Number Fastest 1/4-mile (mph)

3 Second Gust (mph)

EF Number 3 Second

Gust (mph) EF Number

3 Second Gust (mph)

0 40-72 45-78 0 65-85 0 65-85

1 73-112 79-117 1 86-109 1 86-110

2 113-157 118-161 2 110-137 2 111-135

3 158-207 162-209 3 138-167 3 136-165

4 208-260 210-261 4 168-199 4 166-200

5 261-318 262-317 5 200-234 5 Over 200

• 49 F5 Tornadoes since 1950

• Enhanced Fujita Scale replaces Fujita Scale February 1, 2007

• 8 EF5 Tornadoes since February 1, 2007

• Why did EF Scale replace Fujita Scale?

Fujita Scale recalibrated to more accurately match tornado speeds with their damage

and

To augment / refine damage descriptors

23

How Many F5 Tornadoes?

24

What Have We Seen Since 1950?

No true

pattern

Year # of Tornadoes

1953 5

1957 3

1966 3

1968 4

1974 6

1976 3

1990 3

2011 6 (but 4 in the same weather system)

25

• Joplin 5/22/2011 – 158 Fatalities • States Which Lead the Way: • 1st Place - 7

• Alabama • 2nd Place (Tie) – 6

• Iowa, Kansas, Oklahoma, Texas

What Have We Seen Since 1950?

Tornadoes by State Number of Tornadoes Tornadoes per 10,000 sq miles

1 Texas Florida

2 Kansas Kansas

3 Florida Maryland

4 Oklahoma Illinois

5 Nebraska Mississippi

6 Illinois Iowa

7 Iowa Oklahoma

8 Missouri South Carolina

9 Alabama Alabama

10 Mississippi Louisiana

1991-2010

Source: NOAA

Wind Damage

Joplin Tornado, May 2011

Source: Dustie Meads http://www.dustie.com/Tornado/default.html

Contingent Business Interruption Insurance: Underwriting, Coverage and Claim Issues

Lou Adanio

Executive Vice President & Chief Underwriting Officer, Property Insurance

Alterra

• Lou Adanio, EVP & CUO, Property Insurance, Alterra

• John Dempsey, CEO, Dempsey Partners

• Jamie Miller, Managing Director, Swiss Re Corporate Solutions

• Richard Lewis, Partner, Reed Smith

• Michael LaRocca, VP, Global Corporate Property Underwriting, Zurich

Contingent Business Interruption Insurance: Underwriting, Coverage and Claim Issues


Mark Lyons

CEO

Arch Worldwide Insurance Group

Mark Lyons CEO

Advisen Property

Insights Conference M. Lyons

June 5, 2012

Today’s Topics

US Industry Results

Worldwide Market Results (Lloyd’s, Bermuda)

CAT Losses

Risk Management & Concentration Risk

Industry Rate Changes

Gross ROE versus Net ROE

Capital Market Capacity

USA Results Per Dowling & Partners (with SNL Financial)

Source: Dowling & Partners

USA Results: AM Best & ISO/PCI


Lloyd’s Exhibit of WW Markets Results


Lloyd’s Return on Capacity by U/W Year


Lloyd’s 2010/2011 Comparative Results

Lloyd’s Major Claims History

Bermuda CAT Losses

Carriers with most 2011 CAT Losses

Carrier Risk Tolerance Performance

S&P Enterprise Risk Management Ratings

4 Rate Change Barometers


Middle Market Rate Changes: An Indicator of Risks Returning to E&S Market?


CIAB Rate Changes by Account Size

CIAB Rate Changes by LOB

Rate Changes Beyond the Average: Commercial Property

Gross vs. Net ROE

Reinsurance dependent LOB

Starts with gross line capacity & appetite relative to capital

Net vs. ceded decisions on CAT, large risk losses, normal

attritional

QS, XOL, CAT

QS -> Occurrence Limit and Ceding Commission

– Occurrence Limit -> Balance Sheet

– Ceding Commission -> Income Statement

XOL/CAT - > No expense relief; pricing quickly market reactive

Leaves primary insurers chasing their tail to achieve “at least”

CAT Bond Activity

CAT Bond Pricing

The Uses and Misuses of Catastrophe Models

Carl Hedde

Senior Vice President, Head of Risk Accumulation

Munich Re

• Carl Hedde, SVP- Head of Risk Accumulation, Munich Re

• Bill Keogh, President, Strategic Initiatives, EQECAT

• Eyal Shnaps, Manager, U.S RiskMarkets Advisory Group, RMS

• Glen Daraskevich, SVP and Head of Consulting Group, Karen Clark & Co

• Susan Denike, Managing Director, Guy Carpenter

The Uses and Misuses of Catastrophe Models

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