Industry News

Following a rough 2017, US property and casualty (P&C) insurers are positioned for better performance this year in the commercial insurance market sector, according to Fitch Ratings' new report, "U.S. Commercial Lines Market Update (Underwriting Loss Should Reverse in 2018)." Fitch said that commercial lines represent approximately 41 percent of US P&C industry net written premiums.

The Washington State Office of the Insurance Commissioner has ordered an Arizona captive owned by Microsoft that provides coverage to the Microsoft group of companies to cease and desist transacting insurance business in the state and soliciting and writing insurance coverage for Washington insureds.

XL Group recently shared new details surrounding plans affecting XL Catlin and AXA leadership. Full details of the proposed leadership team will not be available until after the AXA-XL deal closes in the second half of 2018. As reported in March 2018, AXA will acquire 100 percent of XL Group Ltd.

XL Catlin and the Stimson Center are creating a predictive model to help identify the developing coastal nations that are most at risk from climate change. The joint effort seeks to better understand how governments and businesses should respond to ocean risks by mapping existing and projected oceanic changes.

The sector outlook for global reinsurance remains negative given intense market competition, the influx of alternative capital that continues to pressure pricing, and persistently low investment yields that strain reinsurer profitability. Reinsurer profitability is expected to improve, reflecting the normalization of catastrophe losses and marginally improved pricing, according to Fitch Ratings.

Aon Benfield's monthly "Global Catastrophe Recap" report reveals that five separate storm systems caused severe thunderstorms across the United States during April 2018. Total combined economic losses from convective storm-related damage in the United States during the month were estimated at $2.3 billion.

Beware of what you wish for—captive insurers are impacted by inflation in a number of ways, and the results are typically not good. The benign inflation of the past 5 years may have led captive insurers to become complacent. Here is why you need to reexamine your inflation risk mitigation strategy.

The Vermont Captive Insurance Association (VCIA) invites you to its annual captive insurance conference set for August 7–9, 2018, in Burlington, Vermont. VCIA will host 1,100 people from all over the world to experience its high-quality educational offerings and take advantage of its numerous networking opportunities.

The Cayman Islands government is unhappy with the Sanctions and Anti-Money Laundering Bill amendment that was recently accepted by the House of Commons. The amendment requires the British Overseas Territories, but not the Crown Dependencies, to establish public registers of beneficial ownership information by no later than December 31, 2020.

A group of Bermuda representatives recently participated in a series of media interviews and live broadcasts in New York. The discussions focused on emerging technologies as Bermuda works to position itself as the world's first regulated hub for blockchain business and digital assets.

IVANS has announced its April "IVANS Index: Premium Renewal Rate Index" results. The beginning of the second quarter continues to showcase increasing premium renewal rates year over year across most major commercial lines.

JLT Re's latest report analyzes the dynamics behind the evolving terrorist threat and examines how the terrorism re/insurance market has reacted. JLT Re advises that although significant progress has been made, there is still more to do in order to deliver a sustainable proposition that offers comprehensive protection to buyers.

According to A.M. Best, specialty insurance groups in the energy and utility sectors have been exploring avenues to leverage their industry knowledge into areas of profitable but conservative and controlled growth in cyber insurance.

Aon has published its 2018 "Risk Maps," covering political risk, terrorism, and political violence. Political violence risks are rising globally due to geopolitical tensions, a weakening of liberal democratic governance, and the repercussive effects of chronic conflicts around the globe.

The "MarketWatch" article "Job Openings Hit Record High at Start of 2018" shows how the war for talent is well under way. Captive insurers that have not started developing and implementing a strategy for recruiting new professionals face real impediments to finding new professionals to hire.

In the recent report "The Rise of Artificial Intelligence: Future Outlook and Emerging Risks," insurer Allianz Global Corporate & Specialty (AGCS) identifies both the benefits and emerging risk concerns around the growing implementation of artificial intelligence (AI) in society and industries, including the insurance sector.

Outstanding capacity under catastrophe bonds is greater than ever, according to Willis Towers Watson Securities. The first quarter of 2018 saw $3.1 billion of underwritten, widely distributed non-life insurance-linked securities (ILS) capacity issued through 12 catastrophe bonds, compared to $1.7 billion through 5 bonds in the same quarter of 2017.

Blockchain is a potentially game-changing technology for the insurance industry over the long term. Benefits could range from significantly reduced operating costs, more accurate customer-specific data, better risk pricing, and improved efficiencies. However, the technology remains unproven, and greater clarity around its advantages and risks will be revealed.

The May 2018 edition of "Captive Insurance Company Reports" ("CICR") is now available. The issue begins with a discussion from Captive Claims Manager Clare Bello, Esq., senior vice president at VCM, a CCMSI division, on "The Science and Art of Reserving in a Captive" on the topic of captive claims management and how to hit the sweet spot in captive loss reserving by practicing a thoughtful and consistent approach.

According to a statement from The Weather Company (TWC), the 2018 Atlantic hurricane season will return to be more like a "normal" season. This is due to cooler tropical Atlantic temperatures and an expected movement away from La Niña conditions.