CATASTROPHE RISK HURRICANES EARTHQUAKES WIND THUNDERSTORMS TRENDS

1
Recent Catastrophe Risk Trends

• Presentation by
• Claude Penland, Associate of the Casualty
  Actuarial Society
• www.ClaudePenland.com

2
Trends Well Cover

• Government
• Investment
• Insurance Linked Securities Issuance
• Regulation
• Partnerships
• New and Updated Models
• Wrap Up

3
Governments looking at Catastrophe Risk

• Brazil creates Cat Fund http//bit.ly/aFFSlj
• India may be considering catastrophe bonds
  http//bit.ly/hNeDZn
• Ethiopia installing more weather stations
  http//bit.ly/aZ0tts
• China http//bit.ly/bWMpdF
• Crop insurance in China http//bit.ly/9sLxIG
• Public Sector Catastrophe Risk Management
  http//bit.ly/dF8WgV

4
Governments, continued

• NY cat pool thoughts http//bit.ly/aIOGO5
• CA tsunami risk http//bit.ly/bnxFG7
• CA gas line risk http//bit.ly/9uvlVb
• Mozambique weather risk mgmt http//bit.ly/b2oF6h
  
• Asia underinsured for cat risk http//bit.ly/acfat
  P

5
Catastrophe Risk as an Investment Vehicle

• Cayman Islands leading issuer http//bit.ly/bWdr3C
  
• Atropos has a new European ILS Fund
  http//bit.ly/fnY5cc
• Catco Investment Mgmt formed http//bit.ly/aq5mbH
  
• Horton Point ILS Fund http//bit.ly/9oLT0z
• Secquaero Advisors, ILS inv mgr, enters Australia
  http//bit.ly/9dh535
• Cat Finance emerging discipline
  http//bit.ly/eM9W7E
• Hurricane Land Risk Options http//bit.ly/9at9i2
• Growing in Middle East http//bit.ly/9WgHFR
• May grow in Canada http//bit.ly/aN5ikA
• Growing Worldwide http//bit.ly/bnX8jk
• Mere thunderstorms now considered in cat bonds
  http//bit.ly/cia9du

6
What should be considered when issuing ILS?

• Identify risk concentrations
• Quantify the loss
• Design structure
• Engage a placement agent or investment banker
• Engage a risk modeling firm
• Decide on loss denomination
• Choose investment vehicle location
• Review
• Execute http//bit.ly/9xpJva

7
New Cat Risk Underwriters

• Liberty Syndicates http//bit.ly/aA5Fjm
• Indian Weather Risk Management market expected to
  rapidly grow http//bit.ly/dnmGDN

8
Catastrophe Risk considered in Solvency II
regulations

• Solv II expects insurers to be prepared for a 50
  Billion cat http//bit.ly/9UENg2
• Aon Benfield says II doesnt acknowledge gains in
  measurement http//bit.ly/9Dbgt3
• Mega Broker says Solvency II could actually be
  catastrophic for the European insurance industry
  http//bit.ly/cHHoGz

9
New Cat Partnerships

• Institute of Cat Risk Mgmt, Nanyang Tech in
  Singapore and Aon Benfield have a research
  partnership http//bit.ly/aiUxrF
• Global Earthquake Model and OpenGEO partnership
  http//bit.ly/d6Gsuc
• Data sharing considered http//bit.ly/akF09x

10
New or Updated Models

• Latin American Flood http//bit.ly/92PpLU
• Asian Risk Model http//bit.ly/9uZAAe
• Asian Typhoon Model http//bit.ly/9aJPWd
• European Cyclone http//bit.ly/ce93PF
• European Wind Risk Model http//bit.ly/a8b8Ea
• Earthquake hot spots http//bit.ly/bdvhzW
• Largest US earthquake simulator planned
  http//bit.ly/9tKpB1
• UK sea level risk http//bit.ly/dCU4Yx
• US pandemic risk http//bit.ly/aRYBJJ
• Philippines http//bit.ly/9zxsBP

11
Additional Catastrophe Risk Background

• An introduction to Volcanoes and Earthquakes
  http//bit.ly/gOAlDF
• Academic Weather Risk papers http//bit.ly/eLbR9g
  
• Cat Modeling tech http//bit.ly/br1UOL
• Amateur hurricane tracking http//bit.ly/9Ob4P6

12
Final Thoughts

• US Government could hurt the ILS market with
  calls for increased regulation and documentation
  http//bit.ly/9wi8Tr
• Should you hire an in-house meteorologist?
  http//bit.ly/cofvM3
• CatRisky.com covers daily catastrophe risk news
  and trends
• Thank you!