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Blue Marble Microinsurance leads industry consortium to develop risk protection in developing world | WRIN.tv

Blue Marble Microinsurance leads industry consortium to develop risk protection in developing world | WRIN.tv | World Risk and Insurance News | Scoop.it
Blue Marble Microinsurance (formerly Microinsurance Consortium and Venture Incubator) was established during the World Economic Forum in January 2015 to provide insurance and risk protection in developing countries. WRIN.tv spoke with Blue Marble CEO Joan Lamm-Tennant during the IIS Global Insurance Forum at the United Nations, about microinsurance, the problems it can address, and where Blue Marble will focus in the future.

According to Ms. Lamm-Tennant, “microinsurance is small premium insurance protection intended to reach the underserved, providing them relief following a disaster. Microinsurance targets small-scale farmers, artisans, and shopkeepers, who have specific risk protection needs.”

Ms. Lamm-Tennant says microinsurance solves problems in the developing world by stabilizing consumption. Incentives are embedded into microinsurance products, “engaging the underserved as risk managers.”

In order for microinsurance to be successful, there is a need for public-private partnerships. Ms. Lamm-Tennant sees a number of hurdles that have to be overcome:
• Cost efficiency
• Partnering with technology partners
• Addressing the lack of trust
• Financial education
• The ability to price without data

Blue Marble Microinsurance is a consortium with American International Group, Aspen Insurance, Guy Carpenter together with Marsh & McLennan Companies, Hamilton Insurance Group, Old Mutual, Transatlantic Reinsurance, XL Catlin and Zurich. They are developing service entities (or ventures), which will allow the carriers to enter the market with risk capital. Ms. Lamm-Tennant says the service entities will include everything from product, to distribution channels, to social impact metrics, etc. She notes that microinsurance has been used effectively in Africa, South America and Asia. Blue Marble intends to announce its first venture in November.

For more of our coverage of the IIS Global Insurance Forum, visit the WRIN.tv On Demand Library.
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ICMIF Chief Exec intros “Smart Investing” $3 trillion to help build resilience and sustainable growth | WRIN.tv

ICMIF Chief Exec intros “Smart Investing” $3 trillion to help build resilience and sustainable growth | WRIN.tv | World Risk and Insurance News | Scoop.it

Can the insurance industry direct its vast assets under management to invest in socially relevant issues like resilience and disaster recovery? Shaun Tarbuck, Chief Executive of the International Cooperative and Mutual Insurance Federation (ICMIF), addressed the 2015 IIS Global Insurance Forum during a session at the United Nations. He unveiled what he called a “Smart Risk” Investing Framework, which would provide guidance for directing investments made by insurance companies

The ICMIF Chief Executive mentioned the importance of the Sendai Framework for Disaster Risk Reduction, published by the UN World Conference on Disaster Risk Reduction in March 2015, which looks to prevent and reduce hazard exposure and vulnerability to disaster, increase preparedness for response and recovery, and strengthen resilience. The codes in the Sendai agreement provide the insurance industry with information that can guide underwriting and investment.   He believes agreements like the Sendai Framework should inform investment and underwriting decisions.

Mr. Tarbuck sees an excellent opportunity for the insurance industry to show leadership. He says the Smart Risk Investing Framework provides the means for the sector to use what is known in the (risk) modeled world and apply it to the asset side. He believes underwriters sharing knowledge with those responsible for investing would be a “sea change.” The opportunity lies in ushering the industry’s $35 trillion in invested assets to help build a resilient world.

“At the end of the day, there are two organizations that ultimately pay for natural disasters: the insurance industry and governments.” With government’s lacking sufficient funds, the insurance industry has a vested interest in better directing its investments wisely and creating opportunities for new business.

The IIS and ICMIF have begun assembling information from members regarding potential “Smart Investing” opportunities, including equities, bonds, portfolios, etc. Only a year ago, Mr. Tarbuck says the insurance industry had less than one tenth of one percent ($42 billion) in resilience areas. He has committed the industry to doubling their investment by the end of 2015, and increasing “smart investing’ ten-fold by 2020. With large ICMIF members already committing, and stock companies participating this year, Mr. Tarbuck believes doubling investments will be achieved…and “that’s just the beginning of the conversation.”

Mr. Tarbuck says a task force of “movers and shakers” in the underwriting and investment world are driving the definitions and framework going forward, for release at the ICMIF Conference in Minneapolis in October, before UN Secretary General Ban Ki-moon announces the initiative at the Conference of Parties (COP) 21 in December.

“This isn’t another green initiative.” Mr. Tarbuck says Smart Investing supports business objectives, including sustainable growth and making the industry more relevant.

For more of our coverage from the IIS Global Insurance Forum, visit the WRIN.tv On Demand Library.

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Disability insurers prepare should Social Security become insolvent - A.M. Best | WRIN.tv

Disability insurers prepare should Social Security become insolvent - A.M. Best | WRIN.tv | World Risk and Insurance News | Scoop.it
In highlights from the First Monday series, A.M. Best Senior Financial Analysts Kate Stefanelli and Michael Adams discuss the precarious funding of the Social Security Disability Income program and the potential impact on disability insurers.

The Social Security Board of Trustees has projected that funding for the Social Security Disability Income program will run empty in 2016. According to Ms. Stefanelli, the Democratic Party is in favor of a short-term solution, which would involve allocation of funds for the Old Age Survivors fund and the Social Security Fund. The Republican Party is looking for a long-term fix, which would involve a complete reform of the program.

Because of the many different proposals, Mr. Adams says it is impossible for insurers to determine which scenario will play out. While the insurers don’t think that Congress will let the program become insolvent, insurers preparing by “looking at contract language, reviewing reinsurance needs, examining the impact on claims systems and looking at how they communicate all of this to policyholders and distribution partners….”

Communication is important. Mr. Adams says disability insurers are looking to educate the public on the importance of income protection and disability, while promoting new products and services. It also give insurers a voice at the table with Congress.

We’d like to thank A.M. Best for their contribution to our program.  If you’d like to see more of the First Monday Series, visit the A.M. Best website.
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Hannover Re Chairman/CEO sees growth in ILS market, Asia Pacific region, and microinsurance | WRIN.tv

Hannover Re Chairman/CEO sees growth in ILS market, Asia Pacific region, and microinsurance | WRIN.tv | World Risk and Insurance News | Scoop.it
WRIN.tv spoke with Hannover Re Chairman and CEO Ulrich Wallin at the S&P Insurance Conference about recent developments in insurance linked security (ILS) market, alternative capital, and Hannover Re strategy for continued growth.

Hannover Re recently participated in two ILS transactions including the Massachusetts Property Insurance Underwriting Association (MPIUA) and Texas Windstorm Insurance Association (TWIA). Mr. Wallin says Hannover Re is doing the fronting for both transactions and worked with Guy Carpenter.

Mr. Wallin reminded us that alternative capital originally started in the CAT bond market, providing additional capacity the traditional market could not fill. Now, alternative capital is competing for business that is currently written by the traditional market. That puts pressure on pricing.   The pricing pressure is “more pronounced in the Florida catastrophe business, which is important business for the ILS market. “

Originally, Mr. Wallin says, banks were very involved in alternative capital in the CAT bond market, and reinsurance brokers were very concerned about the competition. As a result, brokers added the capabilities so they could offer both traditional reinsurance and alternative capital to their clients.

According to Mr Wallin, Hannover Re is growing because of its relationship-driven model and a consistent approach to underwriting. Hannover Re is active in Asia Pacific, where Hannover Re has grown significantly since 2010. ”This is one of the reasons for Hannover Re’s continued growth.” Hannover Re is also involved in credit insurance and microinsurance markets. Mr. Wallin notes that microinsurance is part of micro-finance. Microinsurance products are geared toward low-income populations.

While there are reports about Hannover Re becoming involved in underwriting cannabis companies in the U.S. due to Lloyd’s withdrawal, according to Mr. Wallin there are no current plans for Hannover to become overly involved in that market.

For more of the S&P Insurance Conference visit the WRIN.tv On Demand Library
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Game-changing, drones come with new risks and evolving regulation | WRIN.tv

Game-changing, drones come with new risks and evolving regulation | WRIN.tv | World Risk and Insurance News | Scoop.it
The commercial use of drones is expected to grow rapidly as companies like Amazon and UPS look to use drones to support their activities. Drones can potentially change business models for a number of industries, including insurance. Here, A.M. Best AVP Henry Witmer discusses the use of drones, related liability exposures and the underwriting challenges insurers face.

According to Mr. Witmer, “Liability exposure is going to far outweigh any kind of physical damage exposure to drones.” The areas that could generate the majority of the risk include:

The general operation of a drone can involve risks to commercial and general aviation, and to bodily injury wherever large groups of congregate
Data security issues coming from actually using the drones
Other risks include: property damage, product liability claims, and liability claims.
Less than two dozen companies are writing coverage for drones, but Mr. Witmer expects that to increase. There is very little history or data on drones, therefore becomes more a risk management issue than an actuarial issue. Risk Managers need to identify the potential risk and costs from a liability standpoint.

Mr. Witmer says insurance companies are also looking to use drones to manage claims and do some of the work done by adjusters. The data could be transmitted electronically to an adjuster in another location, so claims can be processed quickly.

Mr. Witmer identified several issues that need to be addressed before the use of drones becomes “fully effective.” He says “You’ll need a qualified, certified operator of the drone, You’ll also need FAA clearance and permission from property owners….drone operator will (also) need to make sure that the drone is in line of sight and that they have full use of the drone. “

There are strong long term benefits to using drones, Mr. Witmer says, “although the approach will have to be in a very careful systematic manner.”

We’d like to thank A.M. Best for their contribution to our program.  If you’d like to see more of the First Monday Series, visit the A.M. Best website.
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S&P warns Health Insurers to tread carefully as Medicaid rolls expand | WRIN.tv

S&P warns Health Insurers to tread carefully as Medicaid rolls expand | WRIN.tv | World Risk and Insurance News | Scoop.it
Joseph Marinucci, Senior Director at S&P Insurance Ratings, joins WRIN.tv to discuss the expansion of Medicaid under the Affordable Care Act (ACA), and the impact on the revenues of health insurers in the segment.

According to Mr. Marinucci, a key provision of the ACA was to improve access to coverage by expanding Medicaid eligibility. To do that it, the ACA raised the income cap and allowed for the inclusion of childless adults. In 2014, health insurers saw an increase in enrollment and ad an increase in revenue.

A recent S&P report revealed that State policymakers were looking to shift Medicaid coverage to managed care organizations and away from fee-for-service plans. Mr. Marinucci says “Health insurers continue to benefit from the ongoing migration of government sponsored lines to the private sector.”

With Medicaid expansion Mr. Marinucci warns insurers about a few key variables, including rate adequacy, coordination of care for a diverse membership base, and the capacity to manage growth from both an operational and financial standpoint.

For more information on S&P’s report visit the S&P website.
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Allied World launched pre-cyber incident solution | WRIN.tv

Allied World launched pre-cyber incident solution | WRIN.tv | World Risk and Insurance News | Scoop.it
Allied World North America launched FrameWRX, a pre-incident cyber risk management solution will help customers avoid, manage and mitigate privacy and network security-related risks.  FrameWRX helps organizations take control of their privacy and network security exposure in a rapidly evolving, and inherently complex, environment.

For more on this story visit the Allied World website
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Anthem and Premera hackers hit U.S. government | WRIN.tv

Anthem and Premera hackers hit U.S. government | WRIN.tv | World Risk and Insurance News | Scoop.it
According to The Hill, researchers believe the China-based hackers suspected of stealing digital records of 4 million federal employees were also behind the cyberattacks on Anthem and Premera Blue Cross.

Investigators believe attacks are focused on gathering intel on espionage targets including defense contractors and government workers.…not on making a quick buck. In fact, the leaked Anthem and Premera data has not been monetized on the ‘Dark Web’, at least so far.

For more on this sorry, visit the story on The Hill website:
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A.M. Best cautious of impact from International Capital Standards. | WRIN.tv

A.M. Best cautious of impact from International Capital Standards. | WRIN.tv | World Risk and Insurance News | Scoop.it
In highlights from the First Monday series, A.M. Best’s Senior Economist Meg Mulry looks at development of international capital standards (ICS) by the International Association of Insurance Supervisors (IAIS), and the timeframe for adoption.

Ms. Mulry notes that the Financial Stability Board (FSB) and the IAIS have identified nine insurance companies that are deemed systemically important. She says the regulators are looking to “stress test these companies in the event of a major market dislocation, or a company-specific event that could impact the overall market.” The FSB believes that these companies should hold more capital for the overall market.

The IAIS has been developing a capital model for systemically important companies and capital standards that capture all the risk they are facing. Ms. Mulry says the IAIS hopes “to incorporate these new capital standards into CommFrame (Common Framework) that all international regulators use to oversee companies that operate in many jurisdictions.”

According to Ms. Mulry, A.M. Best is cautious about the impact the ICS could have on the global insurance market, and will be evaluating the unintended or unforeseen consequences it might have on pricing, product mix, product offering, risk appetite, investment strategies and the cost of capital for companies to operate.

The timeframe for the new regulations are as follows:

December 2016 – Insurance capital standards (ICS) are finalized.
2017-1018 – Field testing CommFrame and ICS and making modifications as needed.
Late 2018 – IAIS to adopt CommFrame and ICS.
2019 – New regulations rolled out – ComFrame and ICS.

 

"We’d like to thank A.M. Best for their contribution to World Risk and Insurance News (WRIN.tv). If you’d like to see more of the First Monday Series, visit the A.M. Best website."

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A.M. Best optimistic about Medical Professional Liability market | WRIN.tv

A.M. Best optimistic about Medical Professional Liability market | WRIN.tv | World Risk and Insurance News | Scoop.it
In highlights from its First Monday series, A.M. Best’s Senior Financial Analyst Dan Teclaw discusses the profitable Medical Professional Liability (MPL) market. According to A.M. Best, 2014 was the ninth straight year of underwriting profit, significant rate increases and tougher underwriting.

Mr. Teclaw sees medical professional liability premiums coming down due to competition, and the market is slowing He notes a trend among physicians who are joining hospitals and large physician groups. Insurers who had previously targeted small physician groups are now targeting larger groups and offering a suite of products, including workers comp, in order to gain access.

Mr. Teclaw is optimistic about the MPL market. With claims frequency stable, “companies have kept their underwriting discipline… (while) generating favorable reserve development.”   These positive developments “translate into more capital and better flexibility for the companies going forward.”

The ACA hasn’t had much impact on MPL insurers, but Mr. Teclaw, notes that it has opened opportunities for insurers to broaden their products and improve premium in the future.

We’d like to thank A.M. Best for their contribution to our program. If you’d like to see more of the First Monday Series, visit the A.M. Best website.
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OECD BEPS will have big impact on taxes for multinational (re)insurers. | WRIN.tv

OECD BEPS will have big impact on taxes for multinational (re)insurers. | WRIN.tv | World Risk and Insurance News | Scoop.it

The Organization for Economic Co-operation and Development (OECD) published its Base Erosion Profit Sharing (BEPS) action plan in July 2013 to address perceived flaws in international tax rules. The Plan was endorsed by G20 with implementation to be completed by the end of 2015.   WRIN.tv spoke with John O’Leary, a Tax Partner in Financial Services at PwC, to gain some insights into the potential impact these tax rules could have on insurers and reinsurers.

 

According to Mr. O’Leary the G20 does not believe multinational corporations are contributing enough and the OECD was charged with developing a solution. “The OECD identified a number of flaws in the international tax regime including the problem of double ‘non-taxation’ – where companies have income, but are not taxed, in two different jurisdictions. The OECD also identified issues in the “misalignment of profit and substance”, where companies have profits in one country and substance in another.

The OECD’s BEPS has a 15-point action plan to redesign the international corporate tax system, including:

Defining a ‘taxable presence’ within a country that a company is doing business,. This will make it more difficult to sell across borders without having a taxable presence.
Restrictions on interest deductibility, particularly when it has been paid through other group companies
Risk and capital
Controlled foreign company rules
Mr. O’Leary believes BEPS, in its current form, will impact international reinsurers doing business across borders. Many reinsurers are “doing business on a ‘freedom of services’ basis, which means they don’t have a presence in countries where they are selling services.” It’s going to be much more difficult going forward.  Other ‘freedom of services’ structures will be affected as well, including: MGAs, Sales Rep offices and sales functions. Companies will have to determine if they have a taxable presence.

With regard to risk and capital, the OECD’s position is that it alone cannot drive the location of profit. Mr. O’Leary says “…risk and capital has to be backed up with substance…and for the insurance industry, substance means underwriters, assumption of risk function, and management of that risk.” According to the OECD “It’s the location of key people around the risk, aligned with risk and capital that is going to drive the location of profits going forward.

Mr. O’Leary says there is talk of a carve-out for the insurance sector, but no decision has been made as yet.

For more World Risk and Insurance News from the 2015 European Insurance Forum (EIF) Conference in Dublin, visit the dedicated EIF 2015 Channel in the WRIN.tv On Demand Library.

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Regulators/Insurers would benefit from global capital standards.

Regulators/Insurers would benefit from global capital standards. | World Risk and Insurance News | Scoop.it
Darren Maher, a Partner and Head of Corporate Insurance at Matheson, spoke with WRIN.tv at the 2015 European Insurance Forum in Dublin about the movement toward global insurance regulation.

The talk of creating a global regulatory regime started in the immediate aftermath of the most recent financial crisis. Mr. Maher says the industry and regulators realized the current regulatory regimes across the world were not adequate, for either risk management and governance issues.

Solvency II is promoting ‘equivalence’ outside of Europe, but Mr. Maher sees key features of Solvency II forming the basis of a global regulatory regime. Countries are using Solvency II’s risk based capital standards and ORSA with modifications to account for differences between the countries.

Mr. Maher believes there are benefits to global regulation. For regulators, “they can speak to each other on the same level when talking about rules or discussing a global insurer.” For insurance groups the benefits include “consistency in approach and application of rules.”

According to Mr. Maher, resistance to global regulation is coming from the insurance industry. In Europe, the industry has gone through the implementation of Solvency II, which has taken a long time and cost a lot of money in terms of capital and new IT systems. Also, people don’t know what a global regulatory regime will look like.

Mr. Maher would like to see the industry and regulators discuss the minimum capital standards. Regulators should meet and communicate regularly. And for global capital standards to be implemented, it is critical that the industry be included in the discussions. Otherwise, that will create delays in its implementation.

For more World Risk and Insurance News from the 2015 European Insurance Forum (EIF) Conference in Dublin, visit the dedicated EIF 2015 Channel in the WRIN.tv On Demand Library.
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Wearable computing will change lives

Wearable computing will change lives | World Risk and Insurance News | Scoop.it

During the 2015 European Insurance Forum in Dublin Jordi Posthumus, a VP of Longevity Trading at Hannover Re, discusses the impact ‘Wearable Computing’ on everyday life, and why it could prove to be traditional underwriting’s Kryptonite.

Wearable computing is a recent development in consumer devices.   The recent release of the Apple Watch is a “genre-defining example of what wearable computing will be…elegant, simple technology” that will have an impact on people’s everyday lives. With the new Apple Watch, for example, “you can open doors at hotels without checking in at the front desk, or track your heart rate, or pay for items without opening your wallet.“

With “real time biofeedback”, there are a number of ways wearable technologies can impact longevity. Devices can make you aware of your heart rate and respiration rate as you move about the day. Ultimately, it can elicit behavioral changes “which could impact your future longevity.“ Biofeedback can also be an effective means of helping people manage stress, which in turn “will almost certainly reshape the health and lifestyle landscape in ways we could never have predicted five years ago.”

According to Mr. Posthumus, wearable technology is going to be “incredibly disruptive to underwriting.” We are about to find ourselves “in a world where our insured population is generating different amounts and types of data that enable us to measure risk that was never possible before, and it could potentially render our rating factors entirely obsolete.”  Indeed, “wearable computing could be… “Kryptonite” to traditional medical-based underwriting approaches.

For more World Risk and Insurance News from the 2015 European Insurance Forum (EIF) in Dublin, visit the dedicated EIF 2015 Channel in the WRIN.tv On Demand

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KPMG Head of Insurance believes public-private partnerships can help close huge protection gap | WRIN.tv

KPMG Head of Insurance believes public-private partnerships can help close huge protection gap | WRIN.tv | World Risk and Insurance News | Scoop.it
The importance of Public-Private Partnerships (PPP) was a key theme at the Global Insurance Forum. Here, Gary Reader, Global Head of Insurance at KPMG, discusses developments in PPPs, and the importance of collaboration between industry and governments.

According to Mr. Reader, there are many issues facing governments today, including climate change, resiliency of infrastructure, and economic stability. Given the risks associated with these issues and the potential cost to mitigate them, there is a protection gap. “The reality is that no public body or government has the resources to address this gap.” Mr. Reader says the cost to insure these risks would be prohibitive. He suggests governments and the insurance industry work together to find solutions.

Mr. Reader says the insurance industry has taken the lead on PPPs. In fact many companies have signed the UN’s Principles for Sustainable Insurance, and attended the UN Insurance Development Forum. It demonstrates that the industry is willing and wanting to engage in these issues.

In a report titled: Demystifying the public private partnership paradigm, KPMG describes how the insurance industry and governments can work together and achieve insurance sustainability and growth.

Mr. Reader says the goals of policymakers and governments are to protect their citizens and take risk off the country’s balance sheet. The insurance industry brings a deep understanding around risk and risk management, which can help address the risks governments face.

According to Mr. Reader, three main objectives achieved by PPPs are to:

provide patient capital – investing in long term capital projects.
leverage the insurance industry’s deep risk management experience to help develop solutions to issues facing governments.
facilitate risk transfer
Mr. Reader suggests insurance companies and policymakers collaborate and remain open minded when it comes to PPP projects. “PPPs demand innovation and new thinking, and the industry and government bodies need to be less cautious.”

The growth opportunity is enormous for the insurance industry. Mr. Reader believes “the protection gap is probably trillions of dollars, and is both a developing and developed markets issue…The industry is not short of opportunity in this space.”

For more of our coverage of the IIS Global Insurance Forum, visit the WRIN.tv On Demand Library.
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CONNecting with Conning: Emerging markets offer investment opportunities despite turmoil | WRIN.tv

CONNecting with Conning: Emerging markets offer investment opportunities despite turmoil | WRIN.tv | World Risk and Insurance News | Scoop.it
Investments in emerging markets are attractive, especially when developed economies are experiencing slow growth or low yields. In this edition of CONNecting with Conning, Gulen Tuncer evaluates investment opportunities in emerging markets for insurance companies. She is CFA and Director and Research Analyst at Conning, responsible for Corporate and Emerging Market Bond Research.

Ms. Tuncer noted the many events that impacted the market last year, including U.S. elections, quantitative easing programs by the U.S Federal Reserve, European Union and Japan, and lower oil prices. These were compounded by other events such as the Russia-Ukraine conflict and economic sanctions against Russia that followed, as well as elections in Brazil and corruption probes into Petrobras. Despite market volatility, Ms. Tuncer says emerging markets performed quite well in 2014.

While emerging markets have come a long way since the late ‘90s, Ms. Tuncer says “… volatility is here to stay due to idiosyncratic risk and market technicals.“ The factors used to rate the different countries include: external debt levels, a commitment to reform, and a healthy level of reserves compared to financing needs. According to Ms. Tuncer, “… countries that fit this profile provide better diversification to investors. “

Ms. Tuncer believes countries offering the most opportunity “are committed to reform agendas in an environment where economic growth is weak, there is currency weakness, and potential inflationary pressures.” Countries offering good investment opportunities include Columbia, Indonesia, Mexico, and to a lesser extent the Philippines.

For more on investment strategies, visit the Conning website. If you missed any of our previous CONNecting with Conning programs, watch them now from the WRIN.tv On Demand Library.
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Aon Benfield exec sees alternative capital moving into commercial insurance market/casualty reinsurance. | WRIN.tv

Aon Benfield exec sees alternative capital moving into commercial insurance market/casualty reinsurance. | WRIN.tv | World Risk and Insurance News | Scoop.it
Bryon Ehrhart, CEO of the Americas at Aon Benfield, speaks with WRIN.tv about the issues affecting alternative capital in the reinsurance market during the recent S&P Insurance Conference. He says the growth in alternative capital has been driven by clients seeking to diversify their sources of catastrophe risk capital and met with investors looking to diversify their investment return.

There has been a lot of discussion about what would disrupt the flow of alternative capital into the reinsurance marketplace. According to Mr. Ehrhart, interest rates would have to rise over 300 basis points before investors would seek other markets. If rates rise between 50 – 100 basis points, the opposite would happen – more capital would flow into the industry with high net worth individuals and pension funds looking for higher yields. Mr. Ehrart does not believe a large loss event would have an impact on the flow of alternative capital. His feels that insurers, reinsurers, and insureds learn from loss events. The same will happen with investors and that will not dissuade them from the market.

The flow of capital first affected reinsurers’ business model. Reinsurers now see alternative capital as a “mandatory element” and have sponsored catastrophe bonds and sidecars, and also manage assets for investors who seek diversification of yield.

Risk modeling plays an important role in attracting alternative capital, Mr. Ehrhart says. The models allow investors to compare deal-to-deal, and sector-to-sector.

Mr. Ehrhart expects alternative capital to enter the casualty marketplace and other short-tail lines, but Aon Benfield believes that “it is likely to go to commercial insurance first. It’s would be a “path of less resistance”, before solving some of the hard problems involved in doing a casualty-based securitization.

For more of the S&P Insurance Conference visit the WRIN.tv On Demand Library
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ND Insurance Commissioner says “we need to step up our game” to address cyber threat. | WRIN.tv

ND Insurance Commissioner says “we need to step up our game” to address cyber threat. | WRIN.tv | World Risk and Insurance News | Scoop.it
In the wake of the high-profile breach of the U.S. Federal Government, WRIN.tv speaks with Adam Hamm about recent developments in cyber risk and cyber security. He is the North Dakota Insurance Commissioner and Chair of the NAIC Cyber Security Task Force, and a speaker at the 31st Annual S&P Insurance Conference in New York.

Mr. Hamm reminds us that there is more than one group or country responsible for the cyber attacks that have taken place. He believes everyone is responsible for protecting themselves from the cyber threat. “We need to step up our game, whether it is the business community, regulators… policymakers, or consumers.”

Currently, a cyber attack is not specifically covered in TRIA. Congress may add language to TRIA stating that a cyber attack is an ‘Act of Terrorism’, but right now it is an “open question.” According to Mr. Hamm, insurance commissioners are working to make sure that Congress doesn’t preempt States Rights. Mr. Hamm explains that insurance commissioners are responsible for protecting the consumer; Congress is responsible for setting the overall standards with regard to data breaches.

The NAIC Cyber Security Task force is putting in place a set of best practices for insurance company examiners, starting in 2016.   Whenever an examiner conducts a financial exam of an insurance company, there will be a set of best practices to test for security protocols and processes to protect policyholders.

The NAIC Cyber Security Task Force is also putting together a Consumer Bill of Rights. Mr. Hamm says it will set expectations for insurance carriers in case of a breach. It will define what companies should do to respond to a breach and to communicate to consumers. It will also et consumers know what to expect from their carrier.

For more of the S&P Insurance Conference visit the WRIN.tv On Demand Library.
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Cyber, Green Technologies, Alternative Capital and Asia present reinsurance opportunities. | WRIN.tv

Cyber, Green Technologies, Alternative Capital and Asia present reinsurance opportunities. | WRIN.tv | World Risk and Insurance News | Scoop.it
In this edition of WRIN.tv’s Reinsurance Today, host Frank Nutter, President of the Reinsurance Association of America (RAA), welcomes Mr. John Bender CEO of Allied World Re to discuss opportunities in the reinsurance market, including emerging risks such as cyber and “green technologies, alternative capital and Asia.

“On the insured level, there are a number of opportunities for growth and cyber insurance is one of them,” said Mr. Bender. “There is a need for cyber insurance especially for the smaller middle market customers. The insurance and reinsurance industry needs to create awareness of the risks associated with cyber attacks and the coverage’s that are available to protect companies.”

According to Mr. Bender, “Green Technology’ is a growth opportunity for reinsurers but over a longer period of time. Green technology is important and alternative energy is very important to the future of our country and to the world. The U.S. Government is starting to privatize a number of government programs and the National Insurance Flood Program is one that should be privatized as it is my belief that the insurance industry can do a better job on that than the government.”

Regarding alternative capital, Mr. Bender sees alternative capital as both a challenge and opportunity. He goes on to say that, “Alternative capital is not something new to the industry. However the amount of alternative capital has grown exponentially over the last few years and that is the threat. Companies that ignore the threat of alternative capital will find themselves irrelevant in the next five years. It is important to find ways to use our relationships and access to distribution to the alternative capital and make it a win- win situation for all.”

Mr. Bender also feels that China offers tremendous growth opportunity for the insurance industry and feels that the premium opportunity for the industry in China would be in the trillions of dollars. He also goes on to say that the rest of Asia as well presents a great many opportunities for the insurance industry.”

If you’d like more information on the Reinsurance industry visit the WRIN.tv On Demand libra
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Lockton/Dynetics partner on cyber risk assessment service | WRIN.tv

Lockton/Dynetics partner on cyber risk assessment service | WRIN.tv | World Risk and Insurance News | Scoop.it
Lockton and Dynetics have formed an alliance to provide Lockton clients with QuickLook, a cyber risk assessment service for executives. QuickLook is part of Dynetics’ Cyber RiskScope, which helps visualize the impact of a cyber incident, current cyber threats and cybersecurity levels.

For more on this story, visit the Dynetics webs
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5 steps to strengthen cyber risk strategies | WRIN.tv

5 steps to strengthen cyber risk strategies | WRIN.tv | World Risk and Insurance News | Scoop.it
In a recent blog post, CNA’s director of Information Risk Insurance, David Hallstrom, said “Everyone Is a Potential Target for a Cyber Attack.” He did offer Five Steps to strengthen cyber risk management strategies.

Perform a risk assessment – Identify system vulnerabilities and understand how your data is managed
Educate your team – Everyone is accountable in managing cyber risks
Know your vendors – Select only service providers that are capable of maintaining safeguards for personal information equal to or better than yours, and contractually requiring them to maintain such safeguards
Address portable devices – Accidental loss and theft of laptops, smartphones and tablets are leading causes of compromised data
Make sure you’re properly covered – Insurance is an important weapon in this war
For more on this story, visit the CNA website:
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WRIN.tv Cyber Report - June 8, 2015 | WRIN.tv

WRIN.tv Cyber Report - June 8, 2015 | WRIN.tv | World Risk and Insurance News | Scoop.it
In this edition of WRIN.tv Cyber Report:

Anthem and Premera hackers hit U.S. government  – 
According to The Hill, researchers believe the China-based hackers suspected of stealing digital records of 4 million federal employees were also behind the cyberattacks on Anthem and Premera Blue Cross.

RIMS backs two cyber bills in Congress – 
RIMS announced formal support for the Data Security and Breach Notification Act and the Policyholder Protection Act.

5 steps to strengthen cyber risk strategies -
In a recent blog post, CNA’s director of Information Risk Insurance, David Hallstrom, said “Everyone Is a Potential Target for a Cyber Attack.” He did offer Five Steps to strengthen cyber risk management strategies

Lockton/Dynetics partner on cyber risk assessment service – 
Lockton and Dynetics have formed an alliance to provide Lockton clients with QuickLook, a cyber risk assessment service for executives.

Allied World launched pre-cyber incident solution – 
Allied World North America launched FrameWRX, a pre-incident cyber risk management solution.

If you’d like more information on the stories in this Cyber Report, visit the WRIN.tv On Demand Library
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EFA Tests reducing workers comp losses from soft tissue injury | WRIN.tv

EFA Tests reducing workers comp losses from soft tissue injury | WRIN.tv | World Risk and Insurance News | Scoop.it
Doctor MaryRose Reaston, Chief Scientific Officer and Founder of Emerge Diagnostics, discusses developments in the diagnosis of soft tissue injuries, defined as a muscle strain, neck strain rotator cuff tear or back pain – the main cause of many expensive workers compensation claims.

Dr. Reaston says Electrodiagnostic Functional Assessment (EFA) Tests are diagnostic tools designed specifically for soft tissue injuries. The EFA Test is a combination of advanced EMG (electromyography) technologies “with range of motion and a functional assessment all rolled into one.

Dr. Reaston describes the EFA Test as “non-loading and non-invasive, so the patient can’t hurt themselves.” It uses pads placed on different muscle groups, which test the muscles at rest and through a range of motion. The EFA Test evaluates muscles…“if they are functioning and functioning appropriately, and if there is fatigue when you return to rest.” The test will identify where a problem is coming from, and even suggest medication and a physical therapy plan. This helps “the patient get better faster (so they can) return to the activities of daily living.”

Looking ahead, Dr. Reaston sees EFAs being refined so it can “pick up more information about muscles, (enable) home use for physical therapy, and monitor compliance.”

If you’d like more information on new trends in soft tissue injuries and diagnosis, visit the Emerge Diagnostics website, or the WRIN.tv On Demand Library.
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Put Social Media into your DNA…connect and engage customers

Put Social Media into your DNA…connect and engage customers | World Risk and Insurance News | Scoop.it
At the 2015 European Insurance Forum, WRIN.tv asked Arjen de Boer, the Founder of ITDS Business Consultants for his take on technology trends affecting insurers and for his advice on the industry’s use of social media.

According to Mr. de Boer, the decline in insurance penetration these days is due, in part, to the economic recession. In England, he says “people don’t feel the need to buy life insurance policies because there is less incentive.” People are putting their money into bank savings as opposed to taking out life insurance policies.

Insurance companies are starting to feel the pressure of new startups and new technologies like Metromile.com or Insurethebox.com, which use telematics to monitor how many miles a person drives and adjust premiums accordingly. Mr. de Boer feels that innovation will likely come from outside of the insurance industry, and technology will play a major role. The danger is: who will become the Uber of the insurance industry?

Mr. de Boer also believes “the industry is falling short in the use of social media… they don’t see the real power of social media…67% of the people worldwide will buy insurance policies… from non-insurance companies like banks and online retailers.” To combat this trend, Mr. de Boer suggests insurers use social media and “put it into their DNA.”

Looking ahead, Mr. de Boer believes the emerging tech trends that could change the way insurers assess risk and service customers include: real insights and actionable data; self-driving cars and wearable technology. Social media and Apps like Twitter and WhatsApp will have an impact on customer service.

Mr. de Boer says social media and social networks are here to stay. And for insurance companies, the most important thing is to be where the customer is. “Right now, that is on mobile and social…Through storytelling on social media, customers can be informed about the benefits of taking out life insurance policies. Put Social Media into your DNA…Connect and Engage.”

For more World Risk and Insurance News from the 2015 European Insurance Forum (EIF) Conference in Dublin, visit the dedicated EIF 2015 Channel in the WRIN.tv On Demand Library
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“Model Bust” could change market… but reinsurance risks can’t be modeled | WRIN.tv

“Model Bust” could change market… but reinsurance risks can’t be modeled | WRIN.tv | World Risk and Insurance News | Scoop.it
At the 2015 European Insurance Forum, WRIN.tv spoke with Charles Goldie, Deputy CEO of the Global Non-Life operations at Partner Re, about major issues affecting reinsurance today, and where he sees opportunities for growth.

Mergers and acquisitions are among the top issues affecting the reinsurance industry today, Mr. Goldie says, due to the amount of capital coming into the industry. He also sees changing risks in the business: “we have been a CAT-dominated industry…(but) that is changing.” Finally, he says managing a reinsurance company and how you handle the change of the business and capital structures today is a challenge.

It is hard to say what will move the market. Mr. Goldie says “we are in a more efficient world.” However, he thinks “model bust” could be the cause…should losses from a catastrophe fall outside the parameters of today’s risk model, and cost 4 to 5 times what was expected, this would cause companies to rethink their investment strategies.

Even though people are talking about analytics and Big Data, Mr. Goldie does not believe reinsurance can be modeled. In the motor insurance market, companies retain their data for long periods of time in the reinsurance industry. “Data is the antithesis of risk, as people understand the risk through models and data, they retain it. It is risk that is not understood, such as cyber or new risks that can’t be modeled, that is reinsured.

According to Mr. Goldie, growth in the reinsurance market is very challenging. “You have to grow intelligently.” He suggests reinsurers need to grow with their clients while “increasing performance, increasing efficiency…and building the relationships in the areas where you already have the expertise. These are the keys to success in the near future.”

For more World Risk and Insurance News from the 2015 European Insurance Forum (EIF) Conference in Dublin, visit the dedicated EIF 2015 Channel in the WRIN.tv On Demand Library.
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Solvency II Will Drive More Corporate Restructuring

Solvency II Will Drive More Corporate Restructuring | World Risk and Insurance News | Scoop.it
Padraic Joyce, an Insurance Partner in the Audit Practice at PwC discusses the impact of Solvency II on corporate structures, and more.
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