1 / 25

Current Issues in Non-Life Insurance 2nd YOUNGER MEMBERS CONVENTION Mohammad Khan

abcd. Current Issues in Non-Life Insurance 2nd YOUNGER MEMBERS CONVENTION Mohammad Khan. 1-2 December 2003 Moat House, Glasgow. What’s General Insurance? General Market Situation Hurricanes, Storms, Fires & Terrorist attacks US & UK Asbestos Investment Bank problems

raheem
Download Presentation

Current Issues in Non-Life Insurance 2nd YOUNGER MEMBERS CONVENTION Mohammad Khan

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. abcd Current Issues in Non-Life Insurance2nd YOUNGER MEMBERS CONVENTIONMohammad Khan 1-2 December 2003 Moat House, Glasgow

  2. What’s General Insurance? General Market Situation Hurricanes, Storms, Fires & Terrorist attacks US & UK Asbestos Investment Bank problems Liability or Why Is It Becoming More Expensive To Be An Actuary? Implications of Regulations What am I talking about?

  3. Any insurance that’s not life insurance Uncertainty relating to: severity; and frequency of claims. What’s General Insurance 1?

  4. Personal Lines Commercial Lines What’s General Insurance 2?

  5. Great time to be writing General Insurance business? Excellent underwriting conditions and good loss experience General Market Situation

  6. But what about after the market turns……..? General Market Situation 2

  7. Example Premium rate movements – 31 December 2002 renewal season: Marine Liability + 20% Hull + 25% Cargo + 15% Specie + 15% Energy Offshore + 40% Energy Onshore + 20% General Market Situation 3

  8. How long will this market last? Where are we in the underwriting cycle? Do we understand amplitude of the underwriting cycle? At what parts of the underwriting cycle do we make profits? What actions should we take? General Market Situation 4

  9. Personal Lines: Competition Household Motor Commercial Lines: Hurricanes, Storms, Fires & Terrorist attacks US & UK Asbestos Investment Bank problems Liability or Why Is It Becoming More Expensive To Be An Actuary? General Market Situation 5

  10. Hurricanes, Storms and Fires World Trade Center (still…..) Hurricanes, Storms, Fires & Terrorist attacks

  11. Hurricane Isobel Colorado Winter Storms P&O Diamond Princess Hurricane Lili Prestige Why not SARS(?) Why not New York blackout(?) Hurricanes, Storms, Fires & Terrorist attacks 2

  12. Hurricanes, Storms, Fires & Terrorist attacks 3 – World Trade Center Property BI Liability

  13. Known as the “miracle mineral” It is a naturally occurring fibre that is in general: Incombustible Flexible Durable Strong; and Resistant to heat duration and wear An ideal material with many uses US & UK Asbestos – What is asbestos?

  14. Building insulation Pipe coverings Wire coatings Asbestos cement Roofing Brake linings Wall and ceiling tiles and coatings Cement US & UK Asbestos – Where was asbestos used? • Almost everywhere • Shipbuilding • Boilers and machinery • Electricity generation plants • Oil refineries • Wallpaper • Textured paints

  15. US Asbestos – What’s the issue?

  16. Nearly one half of all firms that have filed for bankruptcies due to asbestos liabilities have done so in the past two years Market estimates of US asbestos are up to $275bn Joseph Stiglitz has estimated that the US asbestos problem has cost 60,000 people their jobs at an economic cost of up to $3bn Utility worker awarded $47m for mesothelioma The Economist estimated that 94% of asbestos claims filed in 2001 were for unimpaired claims US Asbestos – What’s the issue 2?

  17. Headline reserve increases by large US insurers Settlements Norfolk FELA case Tort reform at state level and in Congress? Greater awareness regarding unimpaired claims US Asbestos – What’s the issue 3?

  18. Market estimates of UK asbestos range from £7bn to £18bn Impact on individual insurers can vary significantly from the market experience Far less bankruptcies expected compared to the US although have been some “casualties”: Builders Accident Chester Street UK Asbestos – What’s the issue?

  19. Laddering Research Spinning Others Investment Bank Problems

  20. Global problem Poor market experience Perceived unavailability for some Media/political interest Liability or Why Is It Becoming More Expensive To Be An Actuary?

  21. Liability or Why Is It Becoming More Expensive To Be An Actuary 2?

  22. Liability or Why Is It Becoming More Expensive To Be An Actuary 3?

  23. Changes in Expectations and Attitudes in the UK “Compensation Culture” Establishment of legal trends seen in US Political interest in the UK DWP OFT FSA Liability or Why Is It Becoming More Expensive To Be An Actuary 4?

  24. CP190 IAS 2 phases: Phase 1: at a minimum implementation of local GAAP by 2005. Phase 2 implementation currently unknown. However, disclosure of “fair value” amounts by 2006 in notes to the accounts required Market value margins Implications of Regulations

  25. Any Questions?

More Related