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RAA Releases Reinsurance Underwriting Review: 2009 Data

The RAA has published the Reinsurance Underwriting Review: 2009 Data, a report that provides a comprehensive summary of the underwriting and operating results of the nation’s major property/casualty reinsurers and the U.S. reinsurance market. The RUR examines reinsurer underwriting and includes balance sheet and invested assets; reserve development and leverage ratios; ceded reinsurance and recoverables; and aggregated analytical content and historical graphs for participating reinsurers. The report is available from the RAA for $250. Contact Geneva Green at green@reinsurance.org for questions or to purchase.

posted August 31, 2010

The RAA Releases Six Months 2010 Underwriting Results

In a survey of reinsurers’ statutory underwriting results conducted by the Reinsurance Association of America (RAA), a group of 19 U. S. property casualty reinsurers wrote $12.3 billion of net premiums during the six-months ended June 30, 2010, a decrease from the $12.8 billion net premiums written in the first six months of 2009. The combined ratio for the group was 98.7%, deteriorating from the 93.8% combined ratio reported for the same period in 2009. The combined ratio is attributable to a 68.9% loss ratio and an expense ratio of 29.8 %. Policyholders’ surplus was $99.7 billion, down from the $101.3 billion at March 31, 2010. Click to review:

posted August 30, 2010

IAIS Releases Mid-Year Reinsurance Market Report

The International Association of Insurance Supervisors (IAIS) has released the mid-year edition of the Global Reinsurance Market Report. “Macroprudential Surveillance and (Re)Insurance” discusses macroprudential surveillance in insurance and reinsurance, looking at current issues and debates on the meaning, scope and value of macroprudential surveillance. The report also discusses current macroprudential surveillance practices among insurance supervisors as well as recent work at the global level. Click here to read the press release and visit www.iaisweb.org to read the report.

posted August 30, 2010

RAA to the NAIC—AAA RBC Methodology is Flawed

The RAA’s Joe Sieverling and Scott Williamson presented a report to the NAIC’s Capital Adequacy Task Force at its summer national meeting criticizing the American Academy’s of Actuaries’ RBC recalibration methodology and demonstrating that it is fundamentally flawed. The RAA noted the AAA’s proposal to recalibrate the RBC underwriting risk factors (premiums and reserves) would require excessive amounts of capital to write NP reinsurance and that the current RBC factors are too high. Current RBC factors are based on a earlier AAA report and require $3.68 in RBC capital to write $1.00 in NP liability reinsurance premium. The presentation also emphasized that requiring excessive amounts of capital have unintended consequences, including a decreased availability and affordability of reinsurance and diminished competitiveness of the U.S. reinsurance industry. As a result of RAA’s report, the NAIC agreed to revise the RBC factors for reinsurance lines which is expected to reduce overall regulatory capital requirements for U.S. reinsurers.

Click here to view the RAA’s presentation.

posted August 20, 2010

Trade Groups Applaud Establishment of Federal Insurance Office

In a letter to Treasury Secretary Timothy Geithner, industry trade groups, including the RAA, applauded the establishment of the Federal Insurance Office (FIO) in the Treasury Department as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In the letter, the trade groups also cited several issues that should be considered during the development and implementation of the FIO—that the Director have the experience and stature necessary to represent the U.S. internationally, preparing and presenting to the Congress important reports on the health and regulation of the industry, and working with senior executives in the industry and regulatory community to further the goal of becoming the federal government’s warehouse of knowledge on all important aspects of the industry.

Click here to read the trades letter.

posted August 5, 2010

Major Victory for the RAA and SmarterSafer Coalition

The RAA and the SmarterSafer Coalition scored a major victory in their opposition to HR 1264 (The Multiple Peril Insurance Act) – legislation that would have included wind as a covered peril in the National Flood Insurance Program—when House Leadership decided to pull the bill from the floor because it lacked enough votes to pass. The RAA and SmarterSafer were instrumental in lobbying against this legislation.

Click here to read the opposition letters by insurance/reinsurance trades, consumer and environmental groups, and the Administration.

posted July 23, 2010

Administration Opposes Wind in NFIP

Acknowledging that windstorm insurance is already readily available in the private sector and through state insurance plans, the Obama Administration has issued a Statement of Administration Policy opposing the inclusion of wind coverage in the National Flood Insurance Program. The statement noted that “expanding the NFIP to cover windstorm insurance would unnecessarily duplicate available insurance products and could ‘crowd out’ such products where they are offered, while offering little to no savings to the American public.” The Administration’s policy statement is another in a series of setbacks to Rep. Taylor’s Multiple Peril Insurance Act of 2009, which includes a provision to add wind coverage.

posted July 22, 2010

RAA Opposes Multiple Peril Insurance Act of 2009

With the legislation expected to be considered in the House this week, the RAA has written a letter of opposition to HR 1264, the Multiple Peril Insurance Act of 2009, which seeks to expand the scope of the National Flood Insurance Program (NFIP) to offer windstorm coverage. The RAA argues that such coverage is currently being provided by private sector insurers, reinsurers, capital market participants and residual market programs. Click here to read the RAA’s opposition letter.

posted July 21, 2010

RAA/SmarterSafer Coalition Express Concerns with Flood Insurance Reform Priorities Act of

The House voted last week to pass HR 5114m the Flood Insurance Reform Priorities Act, legislation that is aimed at reforming the National Flood Insurance Program. While there are important reforms in the legislation, the RAA joined with the SmarterSafer Coalition to express concerns with the legislation—specifically those that would weaken requirements for purchase of flood insurance in newly-mapped flood-prone areas and areas where flood protection systems have been declared inadequate. The RAA and SmarterSafer are encouraged, however, that the legislation does not contain provisions to expand the flood program to include wind damage, which is a peril covered by private homeowner’s insurance. Click here to read the SmarterSafer coalition letter.

posted July 21, 2010

NFIP Extended…Again

President Obama has signed into law the “National flood Insurance Program Extension Act of 2010,” which extends the Flood Insurance Program through September 20, 2010, and retroactively reauthorizes the Federal Emergency Management Agency (FEMA) to enter into new contracts for flood insurance under the Program. This latter action was necessary because the Congress failed to extend the Program before its May 31 expiration.

The short term extensions continue because of disagreement in the House over whether to include wind as a covered peril in the program. The RAA opposes adding wind as a covered peril.

posted July 8, 2010

The RAA has moved...

The RAA has relocated to new offices. Our address is:

1445 New York Avenue, NW, 7th Floor
Washington, DC 20005

Tel: 202.638.3690
Fax: 202.638.0936

posted July 6, 2010

Taxpayers On the Dime for Homeowners’ Defense Act

A Congressional Budget Office (CBO) report confirms that implementing the Homeowners’ Defense Act (aka the “beach house bailout) will cost American taxpayers billions of dollars per year to pay for it. SmarterSafer.org, a national coalition of diverse membership including the RAA, noted that if enacted, the legislation introduced by Rep. Ron Klein (D-FL) “would cost taxpayers billions of dollars, discourage the private insurance market, displace the private insurance market with a new federal insurance system, and result in incentives to build in unsafe and environmentally fragile areas.”

Click here to read more about the CBO report.

posted June 23, 2010

Andy Castaldi Named 2010 ReScholar Educator of the Year

Andy Castaldi, SVP and Head of Catastrophe Perils at Swiss Re America, has been named Educator of the Year by the RAA’s Reinsurance Education Institute. Andy has been an integral part of the Institute’s Catastrophe Modeling Conference, devoting considerable time and energy to helping the RAA plan and execute the highly successful program. Under Andy’s leadership, the Cat Modeling Conference has become one of the most highly anticipated cat modeling events in the industry.

posted June 15, 2010

Three-Months 2010 Underwriting Results

In a survey of reinsurers’ statutory underwriting results conducted by the Reinsurance Association of America (RAA), a group of 19 U. S. property-casualty reinsurers wrote $6.4 billion of net premiums during the three-months ended March 31, 2010, a decrease from the $7.0 billion net premiums written in the first three months of 2009. The combined ratio for the group was 102.2%, deteriorating from the 95.5% combined ratio reported for the same period in 2009. The combined ratio is attributable to a 72.8% loss ratio and an expense ratio of 29.5 %. Policyholders’ surplus was $101.3 billion, up from the $77.3 billion at year-end 2009.

Download results.

posted June 2, 2010

IMF Report on U.S. State Insurance Regulation

A recently-released International Monetary Fund review of the U.S. financial system (“The Financial Sector Assessment Program”) concludes that while state insurance regulation is “generally thorough and effective, there are areas where significant development is needed.” Specifically, the report notes there is a need for development of the policy framework in relation to insurance financial stability and insurance issues, and that the approach to supervision of groups needs significant development.

It is expected the review will increase pressure on the NAIC to conform to IAIS standards or be able to defend any deviations from the standards. Click here to read the IMF’s study and the RAA’s commentary about the study.

posted June 1, 2010

Environmental Groups Endorse Hazard Mitigation Not Federal Insurance Subsidies

The RAA has an ally in opposing Representative Ron Klein’s Homeowners’ Defense Act—a coalition of powerful environmental groups.The coalition, which includes among others, the National Wildlife Federation, American Rivers, CERES, Audubon and the Sierra Club, contends the bill, which provides for a federal insurance subsidy, will create incentives for more development in environmentally sensitive areas and thus increase exposure to hurricane-related risk. The coalition supports hazard mitigation as a well-established, cost-effective means to reduce the impact of natural disasters.

Click here to read the coalition’s letter to Congressional representatives.

posted June 1, 2010

RAA to Forge Relationship with the Angus Robinson, Jr. Memorial Foundation

The RAA and the Angus Robinson, Jr. Memorial Foundation, founded in 1990 by the family of Angus Robinson to honor his dedication to the reinsurance business and his enthusiasm for developing college students’ interest in the insurance and reinsurance business, will join forces to encourage and assist bright young people to enter the insurance/reinsurance industry. It is a natural affiliation. The Foundation provides financial assistance to deserving college students who have strong academic success, involvement in extracurricular activities; the need for financial assistance; and a strong interest in insurance/reinsurance career orientation. The RAA is a highly regarded provider of reinsurance education for industry professionals and has well-established relationships with universities that have risk management and actuarial programs. Pierre Ozendo, chairman of the RAA’s Board of Directors, serves on the Advisory Committee, and Jacques Bonneau, former chair of the RAA Board of Directors, is a Trustee of the Foundation. The RAA expects the affiliation to be formalized before the end of the year.

Click to learn more about the Angus Robinson, Jr. Foundation, their 20th Anniversary Gala, and to contribute to the Foundation.

posted May 24, 2010

Senate Passes Financial Services Regulatory Reform

The Senate approved the Restoring American Financial Stability Act of 2010 by a vote of 59-39 on May 20th. The House passed a similar bill in December 2009. The RAA was successful in working with other trades to oppose an amendment filed by Senator Merkley (D-OR) that would have significantly limited the powers of the Office of National Insurance (ONI). Against a backdrop of intense lobbying, Merkley did not offer the amendment. The Senate ONI preemption language is stronger than the House version, and the RAA will continue to lobby in support of the stronger language as the House and Senate negotiate a final version of the two bills. The RAA and other trades also worked successfully to ensure passage of the surplus lines and reinsurance provisions in the Senate version. With the Senate and House both approving the surplus lines and reinsurance provisions, the RAA expects these state-based reinsurance reform provisions to become law this year.

posted May 21, 2010

NYC All Insurance Industry Day

The St. John’s School of Risk Management’s Center for Professional Education is hosting the New York City All Insurance Day on Wednesday, May 26 at the Manhattan campus of St. John’s. The RAA is one of the sponsoring industry trades for the event. The RAA will teach a session on “Demystifying Reinsurance.” Paul Feldsher, Senior Vice President of Underwriting Practices at Partner Re, will be the course instructor. For more information and to register, go to All Insurance Day.

posted May 21, 2010

Coalition Urges Senate to Retain ONI Power to Address International Issues

An industry coalition that includes the RAA has urged the Senate to reject an amendment offered by Senator Jeff Merkley (D-OR) that would substantially weaken the power of the Office of National Insurance (ONI) to address international issues that are critical to U.S. companies and ultimately, to U.S. consumers. The ONI is part of the Restoring Financial Stability Act of 2010 being considered in the Senate. Click here to read more about Merkley’s amendment.

posted May 10, 2010

House Committee Approves Natural Disaster Financing Bills

The House Financial Services Committee has approved H.R. 2555, the Homeowners Defense Act, by a vote of 39-26. The RAA lobbied in opposition to the bill. Three Democrats voted against the bill--Himes (CT), Kilroy (OH), and Driehaus (OH). The legislation creates 1) a federal consortium to assist state catastrophe funds in securing reinsurance; 2) a federal reinsurance catastrophe fund; and 3) a federal bond guarantee program for state catastrophe funds. Numerous amendments were offered, including some promoted by RAA, however most of the amendments were defeated by a party line vote. The Committee also approved H.R. 1264, the Multi Peril Insurance Act, by a party line vote 40-25. This legislation would add wind as a covered peril under the National Flood Insurance Program. It is unclear when the full House will take up these measures, but the RAA will continue to work with the Smarter Safer Coalition to oppose both bills.

posted April 29, 2010

RAA Elects 2010-2011 Officers

Pierre Ozendo, CEO of Swiss Re America, has been elected Chair of the Board of Directors of the RAA. Mike Morrill, CEO and President of AXIS U.S. Reinsurance Company, has been elected Vice Chair, and Tony Kuczinski, President and CEO of Munich Reinsurance America, Inc., has been elected Secretary-Treasurer. Click here to read the press release on the election of officers.

posted April 29, 2010

Industry Trades Oppose Multiple Peril Insurance Act

Rep. Gene Taylor, D-MS, has introduced legislation that would add windstorm peril to the National Flood Insurance Program (NFIP). The RAA and other industry trades oppose the legislation because it will dramatically increase the exposure of the NFIP and the federal government to catastrophic losses. Read the trades’ letter to the House Financial Services Committee Chair and Ranking Member outlining the drawbacks to Taylor’s proposal.

posted April 22, 2010

Senate Extends National Flood Insurance Program…Again

The Senate finally passed an extension of the National Flood Insurance Program, until May 31, 2010, and the President has signed the legislation into law. What’s next for the NFIP? The House Financial Services Committee has unveiled legislation for a long-term NFIP reauthorization. On April 20th, the House Financial Services Committee will hold a hearing on NFIP reforms as well as Rep. Gene Taylor’s bill, which would add wind to the NFIP. RAA opposes the Taylor bill. There is no similar NFIP legislation in the Senate, so it is unlikely Congress will reauthorize the NFIP this year, but continue to pass short term extensions. Congress is also not expected to pass Taylor’s bill.

posted April 16, 2010

Casualty Actuarial Society Seminar on Reinsurance

The current state of the reinsurance market and the changing ownership structure of the insurance industry will be among the featured topics discussed at the annual Casualty Actuarial Society (CAS) Seminar on Reinsurance, scheduled for May 6-7 at the Crowne Plaza-Times Square, in New York City. Sessions will discuss pricing, reserving, and modeling issues as well as broader reinsurance topics. Both CAS members and non-members are welcome to register for the Seminar.

Additional details can be found on the CAS Web Site.

posted March 25, 2010

RAA Releases Twelve Month Underwriting Results

In a survey of reinsurers’ statutory underwriting results conducted by the Reinsurance Association of America (RAA), a group of 19 U. S. property casualty reinsurers wrote $23.9 billion of net premiums during the twelve-months ended December 31, 2009, which was flat when compared to the prior year. The combined ratio for the group was 93.5%, improving from the 101.8% combined ratio reported for the same period in 2008. The combined ratio is attributable to a 63.3% loss ratio and an expense ratio of 30.2 %. Policyholders’ surplus was $77.3 billion, up from the $64.4 billion reported for the same period in 2008.

Download

posted March 15, 2010

Proposed Homeowners’ Protection Act Ill Advised

In a strongly worded letter to House Committee on Financial Services Chairman Barney Frank and Ranking Member Max Bachus, the RAA came out swinging against the Homeowners’ Protection Act of 2009 (HR 2555)—legislation that would have the federal government guarantee municipal obligations of state sponsored and quasi-state sponsored municipal bonds—essentially creating a federal reinsurance program that would engage directly in offering reinsurance for insured properties. The RAA contends the proposed legislation is primarily designed to address the underfunded state insurance facilities in the state of Florida.

Click here to read the RAA’s letter.

posted March 8, 2010

Senate Recognizes Urgency--Extends NFIP until March 28

Senator Jim Bunning (R-KY), who filibustered legislation that included the reauthorization of the National Flood Insurance Program, finally dropped his objections allowing the Senate to approve the legislation, which extends the NFIP through March 28, 2010. Bunning objected to the legislation—H.R. 4691— because it did not specify what revenues would be used to pay for it. The extension gives Congress the time to consider a broader extension of the NFIP until December 31, 2010.

posted March 5, 2010

Case Law and Contract Clause Database

Since going online in the fall of 2009, the RAA’s Case Law and Contract Clause Database—a research tool for attorneys, contract writers and brokers to quickly access summaries of reinsurance case rulings and/or a court’s interpretation of the wording of a particular contract—has been updated to include 44 additional cases, and excerpts and court discussion of the clauses related to these cases have also been added.

A few of the recent rulings are:
•    Arbitrator panel selection, allegations of bias, and panel authority;
•    Scope of the arbitration clause, including demand for arbitration by non-signatory;
•    Waiver based on a service of suit provision;
•    Reverse pre-emption on the basis of the McCarran-Ferguson Act;
•    Discovery of reinsurance information.

Visit the Case Law and Contract Clause Database to review these and other new rulings. If you’re not signed up for the Database, contact Pat Cheetham at cheetham@reinsurance.org.

posted March 5, 2010

RAA, AIA and Ceres Urge NAIC To Implement Climate Risk Disclosure Survey

With states set to implement the NAIC’s Insurer Climate Risk Disclosure Survey this May, opponents in some states—primarily insurers who have raised concerns about their ability to respond to the survey—are in a full court press to delay the Survey. The RAA, AIA and Ceres have gone on record with the NAIC to move forward with the survey’s implementation in May as planned, and commending the NAIC for developing a disclosure survey that would (1) provide uniformity of information rather than multiple disparate state initiatives, and (2) facilitate a central repository of public information rather than multiple response repositories, which would be less efficient for the states and consumers. Click here to read the RAA, AIA, Ceres letter.

posted March 2, 2010

Worries Over Ballooning Federal Deficit Scuttles NFIP Extension

The National Flood Insurance Program (NFIP) has lapsed after Senator Jim Bunning, R-KY, blocked omnibus legislation that included renewal of the NFIP. Bunning doesn’t oppose extending the NFIP, but the method being proposed to pay for it, which would add to the deficit. NFIP has been extended a number of times in the last two years while Democrats and Republicans argue over whether wind damage should be a covered peril in the program. Democrats support including wind; Republicans and many insurance industry trade groups do not.

Until the program is reinstated, the NFIP cannot issue new policies, increase coverage on existing policies or renew expiring policies.

Click here to read the National Underwriter article on the NFIP.

posted March 2, 2010

Coalition Opposes Homeowners’ Defense Act

In a letter to Representatives Barney Frank and Spencer Bachus of the House Financial Services Committee, the Americans for Smart Natural Catastrophe Policy, which counts the RAA among its members, expressed strong opposition to the Homeowners’ Defense Act, H.R. 2555, which will be heard in the Financial Services Committee in March. “If enacted,” the Coalition notes, “the Homeowners’ Defense Act will cost taxpayers billions of dollars, discourage the insurance and reinsurance private market, and result in incentives to build in unsafe and environmentally fragile areas.” H.R. 2555 was introduced by Ron Klein of Florida to create a federal bailout program designed specifically to benefit hurricane-threatened Florida at the expense of all U.S. taxpayers. Click here to read the Coalition’s letter; click here to see the Coalition’s members.

And on a related note, a group of environmental groups—among them, the Sierra Club, National Wildlife Federation, and the Audubon Society—separately sent a letter to Barney Frank expressing “significant concerns” that providing a federal insurance subsidy will only create incentives for more development in environmentally sensitive coastal areas and increase exposure to hurricane-related risks, leaving more people more exposed to harm and increase adverse impacts to the environment. Click here to read the letter.

posted March 2, 2010

Global Reinsurance Market Competitive, Supply Abundant, Pricing Down

Despite tumultuous financial markets in 2008/2009, global reinsurers continued to provide needed capital and risk transfer capabilities to the U.S. market, including the U.S. cat risk market. The market is characterized by abundant capacity, competition, and a downward trend in pricing. Click here to read more about the state of the reinsurance market at 1/1/2010.

posted February 3, 2010

Insurance Trades Fight Efforts to Amend McCarran-Ferguson

With Congress set to consider legislation to amend the McCarran-Ferguson Act in early February, insurer and reinsurer trade association are poised to fight the proposed changes to the rules for medical liability insurers, arguing that med mal is not a health insurance product, but rather a property/casualty insurance liability product.

In a letter sent to members of Congress, the trades try to clear up a number of popular misconceptions about McCarran-Ferguson—that its antitrust provisions protect anticompetitive activities by medical liability insurers (they do not); that McCarran-Ferguson gives insurers a blanket exemption from antitrust laws (it does not); and that efforts to further limit McCarran-Ferguson’s antitrust provision could lead to less competition—an outcome that would undercut the fundamental purposes of the federal antitrust laws.

Read the letter.

posted February 3, 2010

SmarterSafer Coalition Submits Recommendations on Natural Disaster Recovery

The SmarterSafer Coalition, which counts the RAA among its members, has submitted a letter to the Secretary of Homeland Security and the Secretary of Housing and Urban Development—two members of the White House Long-Term Natural Disaster Recovery Working Group that has been charged with making recommendations to the President so that a national framework for addressing disasters can be established—asking them to consider disaster preparedness and disaster resiliency as a means to ensure quick recovery following a natural disaster. The group urges (1) pre-disaster mitigation focused on property owners; (2) inclusion of disaster resiliency in existing programs, such as the American Recovery and Reinvestment Act; and (3) not building in high-risk and environmentally-sensitive areas.

Click here to read the Coalition’s letter.

posted January 20, 2010

Reinsurance Education

2010 Programs:
Cat Modeling
February 9-11, Orlando
ReUnderwriting
March 23-24, Bermuda
ReBasics
May 10-12, Chicago
Current Issues Forum
May 18-20, Philadelphia
ReContracts
July 20-23, New York
ReClaims
September 15-16, New York
ReFinance
October 28-29, New York