• ABIR Comments on Study on Natural Catastrophes and Insurance

    Statements / Letters | US Regulatory | 06.21.2013

    ABIR Comments
    Study on Natural Catastrophes and Insurance

    June 21, 2013

    Via Federal Rulemaking Portal:

    The Honorable Michael McRaith Director
    Federal Insurance Office
    US Department of Treasury
    1500 Pennsylvania Ave., NW Washington, DC 20220

    Subject: Study on Natural Catastrophes and Insurance

    Dear Director McRaith:

    On behalf of the 21 members of the Association of Bermuda Insurers and Reinsurers (ABIR) we offer these comments in response to the consultation request on natural catastrophes and insurance.

    1. The current condition of, as well as the outlook for, the availability and affordability of insurance for natural catastrophe perils in all regions of the United States, including whether a consensus definition of a “natural catastrophe” should be established and, if so, the terms of that definition; ABIR members provide more than 40% of the natural catastrophe reinsurance available to US ceding insurers. Most of this is supplied on a cross border basis. Our members also write in the US property insurance and reinsurance. ABIR members have also been leaders in the “convergence” of capital markets assuming of catastrophe risk. Many ABIR members pioneered the use of “sidecars” so that capital providers could assume risk in a companion relationship with a reinsurer. ABIR members have also been leaders in catastrophe bonds, issuing them for their own risk transfer purposes; and investing in them to assume additional risk from clients. Many ABIR members now operate their own capital markets units to further assist in putting capital to work to assume catastrophe risk and grow future markets. Current market conditions are characterized by an abundance of capacity for insurance and reinsurance of natural catastrophe risk. The long run trend since Hurricane Andrew in 1992 shows a continuing growth in the amount of capital seeking to earn a return by managing property catastrophe risk. This trend has now continued for more than 20 years and thus provides confidence to US policymakers that insurance and reinsurance capacity is available to meet US market needs. Outside the US and the EU, the growth in developing markets is also encouraging. As property values grow, development expands and insurance penetration increases, benefits will accrue to the US. Additional premiums will move into the risk pools taking on these large risks and through the benefits of diversification, capital charges to support US peak zones will decline as a multiple set of peak zones around the world take the pressure off of capital allocation to the Florida hurricane and California earthquake peak zones.
    2. The current ability of States, communities, and individuals to mitigate their natural catastrophe risks, including the affordability and feasibility of such mitigation activities;
      ABIR supports of the work of citizens and communities to better manage the catastrophe risk that threatens lives and properties. Insurers have long supported hazard mitigation research. Past examples include the 19th century work on steam boiler safety, the 20th century work on electrical products as illustrated by the work of Underwriters Laboratories; the late 20th century work on auto safety at the Insurance Institute for Auto Safety and the recent expansion of the research and scientific analysis on property mitigation by the Insurance Institute for Business and Home Safety (IBHS). The industry’s work assists with the construction and product engineering science that allows communities and citizens to make informed choices on how to protect their families and property. Hazard mitigation retrofits for homes to protect against hurricane or earthquake damage are cost effective and can be done in a manner that is affordable to most home owners. The additional costs of building new homes to meet the IBHS FORTIFIED standards also are affordable, as evidenced by the fact that Habitat for Humanity has incorporated FORTIFIED standards into a number of its new home projects. We defer to the experts at the IBHS which have made more detailed hazard mitigation comments in their filing with the FIO. The payback is great; government research has shown that every dollar invested in hazard mitigation returns four dollars in savings (2005 study, National Institute of Building Sciences’ Multi-hazard Mitigation Council). IBHS research post Hurricane Charley in Florida found that homes built to modern building codes suffered 60 percent less damage, and that the frequency of damage among houses built to such codes was 40 percent lower than among homes that were built to older codes. The IBHS cites to other research which notes that had modern building codes been in place at the time of 1992’s Hurricane Andrew insured losses would have been cut in half. Lower insured losses correlates with lower insurance prices.

      We’d encourage state policymakers to target their municipal or state bond resources to hazard
      mitigation measures so that funds are available for community wide improvements or to support low income home owners. Investments in these hazard mitigation projects will provide a long term payback to the community and citizens as contrasted with the using bonds to subsidize annual consumer insurance costs these bonds produce no long term value; in fact just the oppose occurs consumers are saddled with an ever growing long term debt as losses on subsidized insurance programs accumulate over time.

      In order to gain value from building codes, communities must keep them up to date and enforce them. One of the lessons from Hurricane Andrew was that a good building code was devalued by lax enforcement. The insurance industry through the ISO Building Code Effectiveness Grading Scale (BCEGS) evaluates communities on enforcing quality codes. The IBHS also recently completed a first
      of its kind “Rating the States” report which examines regulations and processes governing residential building construction in the 18 states most vulnerable to catastrophic hurricanes along the Atlantic and Gulf Coasts. The research identified a wide range in the quality of building code safety systems ranging from 4 to 95 on a 100 point scale (zero the weakest, 100 the strongest). 

    A. The current and potential future effects of land use policies and building codes on the costs of natural catastrophes in the United States; The Biggert Waters National Flood Insurance Program reauthorization puts in place important new standards on flood plain mapping and risk based pricing for insured properties. Since its inception the NFIP has been used incorrectly as a vehicle to encourage coastal development via unwise premium subsidies. The new law is already subject to threats to undermine the mapping and risk based pricing provisions. Congress and the Administration should stay the course to ensure that the benefits expected to follow from the new law can actually be achieved. The most important benefits are the protecting of people and property that will flow from the improved risk analysis mapping and the mitigation programs tied to specific NFIP risk based insurance pricing. Separately, federal state and local efforts to better understand impact of climate change and sea level rise also need to be a priority. Various programs are underway to encourage communities to assess the impact of climate change. The results of this research should then inform land use policy at the local level. ABIR members are contributing to climate science research through their work with the Geneva Association’s climate study projects and with the BIOS (Bermuda Institute for Ocean Science) Risk Prediction Initiative climate research. 

    B. The percentage of residential properties that are insured for earthquake or flood damage in high-risk geographic areas of the United States, and the reasons why many such properties lack insurance coverage; We have no comment on this item.  
    C. The role of insurers in providing incentives for risk mitigation efforts; We have no comment on this item.
    3. The current state of catastrophic insurance and reinsurance markets and the current approaches in providing insurance protection to different sectors of the population of the United States; In response to this question, ABIR makes these four main points:
    • Reinsurance capacity available to take on natural catastrophe risk is at record levels;
    • Alternative capital providers interest in taking on catastrophe risk is at record levels;
    • State residual markets have had great success in transferring risk direct to reinsurance markets and via Insurance Linked Securities; and
    • Because of the abundant supply of reinsurance (traditional and non-traditional providers) prices are falling and this should have a positive spillover effect on availability and affordability of insurance for consumer.

    Point One: Reinsurance capacity available to take on natural catastrophe risk is at record levels. There are various methods of measuring reinsurance capital. The world’s largest broker Aon Benfield calculates reinsurance capital as the capital available to insurers and reinsurers that underwrite reinsurance. The firm estimated this at $505 billion at year end 2012.i The firm’s subset of 31 traditional reinsurers reported capital of $313 billion at year end 2012.ii Guy Carpenter (a unit of Marsh) reported that year end 2012 reinsurance capital amounted to $201 Billion but that overall capacity when leveraged from this capital base amounted to $312 billion at April 1, 2013.iiiProperty catastrophe reinsurance is a subset of this reinsurance market. Dowling and Partners, in a review of Guy Carpenter data, concluded that $240 billion of limit (coverage) was written in 2012 in property catastrophe. The US accounted for one third ($79 billion) of this limit.iv

    Numerous other broker and trade publication sources document that capital available to assume catastrophe risk is at record levels. This ample supply is exceeding demand thus creating market conditions where reinsurance prices are declining.

    Based on the current market conditions, excess supply compared with demand, reinsurers have been returning capital to shareholders via increased dividends and stock repurchases. This capital management strategy is simply another documentation of additional available capacity that could be put to work to manage US property catastrophe risk as the demand for it grew.

    Point Two: Alternative capital providers’ interest in taking on catastrophe risk is at record levels; increasing reinsurance supply Evercore Group L.L.C. Research in May 2013 estimated (citing Guy Carpenter data) that alternative markets supplied $44 billion in property catastrophe limits while traditional reinsurance supplied $268 billion (summing to the $312 billion previously cited by Guy Carpenter).v Goldman Sachs broke this $44 billion in non-traditional capacity down to $6 billion in cat bonds; $10 billion in retrocession; $13 billion in collateralized reinsurance (here defined as unrated entities that collateralize policy limits for the customer), and $15 billion in industry loss

    Guy Carpenter commenting on this record alternative capacity noted: “In general terms, it is safe to say that capacity from alternative markets has never been more competitive and in some cases it is clearly priced below the traditional market.”vii Carpenter further reported that cat bond risk capital outstanding is at an all-time high and that for 2013 it expected new issuances would exceed the previous record of $7 billion.

    Much attention has been focused on the record low interest rate environment as the primary reason driving new capital into assumption of catastrophe risk. The Insurance Insider quoted GC Securities as follows: “This is stable capital that has spent years evaluating the catastrophe risk asset class, looking for both steady returns and, in the aftermath of covered events, orderly payment of losses.”viii

    The Insider further quoted GC Securities global head of distribution Chi Hum as saying: Conservative institutional asset managers had largely accepted catastrophe risk as a component of a mainstream investment strategy. The broadening investor base is certainly a positive trend for the long term, as it increases the level of available capacity without leaving the market susceptible to reckless capital.”ix

    The impact of this record inflow of capacity was documented by Deutsche Bank in their recent ILS Market Update: “The most notable theme in 2013 has been the sharp downward shift in ILS pricing, supported by robust capital inflows chasing limited product in both the primary and secondary markets. New issue pricing for deals with US wind exposure has fallen approximately 50% YoY at the 1.0% E(L) mark.”x

    The dedicated insurance linked securities investment vehicles represent pension funds, capital investors, reinsurers and their sidecars, mutual funds, specialized collateralized reinsurers. According to Goldman Sachs, nine are located in Bermuda; and seven each in the European Union, Switzerland, and the United States.xi

    The prominence of Bermuda in this sector is expected since it is the center for global property catastrophe underwriting. The Bermuda Monetary Authority’s (BMA) licensing regime for special purpose vehicles, the Bermuda Stock Exchanges capabilities for providing liquidity in trading risk and the catastrophe underwriting expertise make Bermuda a logical location for convergence in this market.

    Point Three: State residual markets have had great success in transferring risk direct to reinsurance markets and via Insurance Linked Securities. The beneficiaries of this ample reinsurance market capacity are insurance consumers. Citizens Property Insurance Corporation of Florida, the state’s largest insurer (and residual market) and one of the country’s largest property insurers, priced a catastrophe bond in March 2013 that showed a year over year rate on line decline of 40%. In two years Citizens has placed two bonds accumulating to $1 billion in protection.xii Citizens’ has also placed $605 million in traditional reinsurance.

    In a pitch to the Texas Windstorm Underwriting Association (TWIA), Guy Carpenter reported: stable traditional reinsurance market supply; excess capacity; capital market transactions occurring at below market clearing prices; and the non-traditional capacity as a result is putting downward pressure on pricing.xiii

    The Insurance Insider reported in May that both Allianz and Travelers were able to purchase cat bond covers at “significantly lower prices than they paid last year.”xiv The Insider documents the “upsizing” of the bond amounts and the decline in prices for cat bond sponsors that include major US property insurers and residual markets for Florida, Louisiana, and North Carolina (each of these bond placements was via a Bermuda special purpose vehicle). Florida has already been mentioned, but it is also noteworthy that the North Carolina Insurance Underwriting Association and the Joint Underwriting Association via Tar Heel Re increased its bond offering from $200 million to $500 million and the bond cost was reduced by 11%; and the Louisiana Citizens Property Insurance Corporation’s vehicle Pelican Re increased its offering from $100 million to $140 million and the bond cost was reduced by 17%. For insurers, the Nationwide Mutual vehicle was increased from $200 million to $270 million and the bond cost was reduced by 28%; the Allstate Sanders Re bond was increased from $250 million to $350 million while the bond cost was reduced by 14%; and the Travelers’ Long Point Re deal was increased from $150 million to $350 million while the bond cost was reduced by 9%.

    As an indicator of potential additional growth in the alternative risk transfer sector, Nephila Capital’s Greg Hagood suggested recently that an additional $20 billion could be raised from investors to handle $20 billion in risk held in state residual markets.xv Nephila is the largest catastrophe risk manager for investors.

    Point Four: Because of the abundant supply of reinsurance (traditional and non-traditional providers) prices are falling and this should have a positive spillover effect on consumer insurance availability

    In reinsurance markets 2012 has become known as the year of convergence. The basic point being that risk transfer markets include nontraditional reinsurers (pension funds, asset managers) and reinsurers. Both sets competing for the same customers; both eager to take on more risk than the market is currently demanding. The impact of this is intense price competition. In 2013 brokers reported that pricing has “decoupled” with catastrophe bonds prices now declining below that charged by reinsurers. In May Bryan Ehrhart, Chair of Aon Benfield’s investment banking unit and chief strategy officers, reports that in the last eight weeks the cost of risk transfer via cat bonds had dropped an average of 37%.xvi This decoupling is occurring for a number of reasons, according to the trade press reports: more experienced capital markets investors; the excess of supply over demand; and the avoidance of the peak zone issue that plagues traditional reinsurers (the alternative markets represent many different pools of capital which are not aggregating risk on a single balance sheet thus the peak zone capital charge is avoided).

    Most of Florida’s property catastrophe reinsurance contracts renewed on June 1. Brokers and trade publications are reporting 15 to 20% price declines (on a risk adjusted basis) in year over year reinsurance rates. The lower prices are causing some insurers to actually buy more reinsurance than was originally anticipated. In Mid-May according to Guy Carpenter Managing Director Lara Mowery firm order terms on Florida business shows prices declined of between 5 and 15%.xvii By the end of May the Insider reported that catastrophe reinsurance rates in Florida were down on a risk adjusted basis by 15 to 20%.xviii  The Insider also reported that Citizens achieved a 30% risk adjusted decline in its $604 million open market layer reinsurance price.xix

    It’s not only Florida that is benefiting, US cat rates fell 5 to 10% at the April 1 renewals, according to Willis Re. And as reported already, due to soft prices insurers are buying additional reinsurance protection and trying to lock in prices on multiple year contracts.xx

    The excess of supply over demand means that reinsurers and insurers are looking for new markets, both within the US and outside the US. Aon Benfield’s Ehrhart argues that the secondary mortgage market giants Fannie Mae and Freddie Mac should mandate that mortgages which they insure be protected with earthquake insurance. This is similar to how flood and wind risk is managed. If earthquake shake damage was mandated as a condition of a mortgage, Ehrhart believes that insurance costs for coastal home owners would be reduced by 20 to 35%.

    “If earthquake was required, people that live on the hurricane coast from Texas to Maine would see their hurricane [premiums] down 20-35%,” Ehrhart said.xxi

    This would occur basically because industry capital would now be distributed over two peak zones: California and Florida with greater premium supporting the greater amount of insured risk. Because insurers would be diversifying their risk with the two different, uncorrelated perils, the capital charge to support that additional risk would be decreased. The reduced capital requirements, means reduced prices.

    The dynamic in the private reinsurance markets today provides evidence of the opportunity afforded to the FIO to lead the way in public policy recommendations that expand the availability of insurance while also reducing the dependence of certain programs on taxpayer support.

    The current financial condition of State residual markets and catastrophe funds in high-risk regions, including the likelihood of insolvency following a natural catastrophe, the concentration of risks within such funds, the reliance on post event assessments and State funding, and the adequacy of rates; ABIR will comment on the experience in three of the states most exposed to hurricane risk: Florida, Louisiana, and Texas.

    In Florida, the state’s residual market (Citizens) has ballooned to be the largest insurer in the state and one of the largest property insurers in the country. There are multiple reasons for the influx of business into Citizens: home insurance rates below those of private market insurers; concentration of risk issues for insurers that lead them to cede the wind risk to Citizens; problems with claims inflation from improper loss adjustment; fraudulent or inflated sinkhole insurance claims.

    The politics of Florida make it difficult for Citizens to function as other residual markets do that being authorized by statute to charge a rate that is higher that private market rates. Florida has a so- called “glide path” in place that allows Citizens to gradually increase rates. In 2013 several private sector companies have agreed to take risk out of Citizens. In fact, last fall, Citizens moved more than 375,000 policies to the private sector; and this year it moved$30 billion in wind exposure via a depopulation plan with Weston Insurance.xxii Additional depopulation plans are in the works. Citizens reported in May that over 2012 and 2013 it have moved an estimated 445,000 policies via take out programs. This in turn means that Citizens’ probable maximum loss in a 1-in-100 year storm fell from $23.5 billion to $19.9 billion, a 15-percent decrease. The potential emergency assessment levied on all policyholders fell from $7.3 billion to $3.8 billion, a 47.2 percent reduction.xxiii

    This clearly demonstrates that there is private sector risk appetite for additional Florida private sector insurance risk bearing.

    The ticking time bomb though for Citizens is its reliance on bond debt. In the event of a very large hurricane or series of hurricanes, Citizens’ available funds will be depleted and it will have to issue bond debt to finance its consumer claims. Citizens’ has been successful in transferring up to $1.85 billion in risk to reinsurance and other risk transfer vehicles. But its available funds to pay a 1/100 year hurricane include assessments and surcharges that total $1.740 billion annually.xxiv These surcharges and assessments for bond debt may extend for decades. The entity continues to collect hurricane taxes for its loss claims from the 2004 and the 2005 hurricane seasons. In short the NFIP’s $25 billion in debt may foretell the eventually debt that Citizens and the Florida Hurricane Catastrophe Fund (Cat Fund) will eventually hold. If Citizens were able to move substantially towards risk based pricing, large numbers of policies would be transferred to the private sector. Until then the state is playing a game of chicken as to which comes first: additional hurricane free years that may aid in depopulation, or a mountain of debt from multiple hurricanes that threatens the assessment base and exposes Florida taxpayers to substantial risk and state guarantees.

    Also in Florida, the Cat Fund is dependent on bond debt to finance its claims obligations to ceding insurers. Policy makers in Florida, including Rep. Bill Hager author of a reform billhave noted that the Cat Fund sells phantom reinsurance that cedents are required by law to purchase. The Hager bill would have incrementally shrunk the Cat Fund over the next three years so that it would be more likely to meet its obligations and be able to trade forward in years following a major event. According to written comments of the Cat Fund Administrator Jack Nicholson in four of the last five years (2007, 2008, 2009, 2011, 2012) the Cat Fund would not likely have been able to sell enough bonds to pay the reinsurance claims from large storms. The Florida Office of the Commissioner of Insurance estimated, in a letter to a state legislator, that the failure of the Cat Fund to pay 25% of its claims would lead to the 24 of the top 50 home insurers in Florida failing to meet their minimum solvency capital requirements. These insurers make up 35% of the marketxxv.

    Regrettably the Hager bill did not pass this year, in spite of testimony from Insurance Consumer Advocate Robin Westcott that the reductions in the Cat Fund layers would have not had any effect on insurance prices due to broader reinsurance market considerations.

    For the upcoming hurricane season, the Cat Fund estimates that it can successfully sell enough bonds to pay for its first season obligations, but that for the following season it would likely be unable to meet its obligations and be unable to sell up to $7 billion in bonds. Thus leaving ceding insurers with phantom reinsurance. The Cat Fund has the legal authority to buy private reinsurance to fill this gap, but has not done so. Since the purpose of the Cat Fund is to provide a stabilizer to Florida’s insurance markets, the fact that it cannot provide financial support for mandatory coverages in the years following a large loss event demonstrates a fundamental weakness in system design.

    In Louisiana, the Citizensstatute compels it to charge rates that exceed those of private sector competitors in the market. This is the main reason why the Louisiana fund is shrinking rather than growing. In fact Commissioner of Insurance Jim Donelon has noted that Citizen’s today insures fewer Louisianans than the residual market did prior to Hurricane Katrina. Thus the Louisiana experience is a stark reminder of basic insurance fundamentals if insurers can earn a profit on the business they write they will make a market. Policy measures which limit the ability for an insurer to earn a profit will limit private sector capacity and will in turn lead to inflated residual market populations. A number of Florida domestic home insurers have expanded into Louisiana in order to take advantage of business opportunities in that state while also diversifying their Florida hurricane risk.

    In Texas, then state Insurance Commissioner Eleanor Kitzman threated to take the Texas Windstorm Underwriting Association (TWIA) into insolvency proceedings because it has an excess of liabilities over assets today (a negative surplus of $183 million at year end 2012 according to press reports) and since the TWIA statute fails to provide a funding structure that allows it to pay future claims. Although TWIA collected on $1.5 billion in reinsurance protection for Hurricane Ike it failed to have sufficient premium income to manage future unexpected claims inflation from that storm. The state is another one where subsidized rates have discouraged insurers from taking risks out of the residual market and thus the plan is not operating as a market of last resort. The Commissioner estimated that 20% of the risk are correctly priced based on risks; but that as a whole TWIA business suffered from more than 40% rate inadequacy. TWIA meanwhile is in the market to purchase reinsurance an abundance of reinsurance capacity is available to help Texas manage its hurricane risk. The new Insurance Commissioner is weighing those options now.

    In conclusion, we’d note:

    • States should use their bond authority to implement hazard mitigation programs thus using their taxing powers to produce a public good with a near term cost benefit gain; rather than to operate insurance subsidy programs;
    • States should recognize that “red tape” and limitations on risk based pricing in state laws deter private capital from taking catastrophe risk;
    • Consumer demands for lower prices can be best addressed with hazard mitigation, strong building codes and local enforcement of those codes; and with targeted subsidies for low income consumers;
    • States create political risk by post event actions that prevent use of regulatory- approved storm deductibles, limiting non-renewal measures or trying to “lock in” insurers which are overexposed and need to shed business. Residual markets should not be the only providers of coastal property insurance and the evidence in the states is clear that some state policy makers have made choices that have led to small residual markets; while others have made choices that have led to large residual markets.

    The current role of the Federal Government and State and local governments in providing incentives for feasible risk mitigation efforts and the cost of providing post-natural catastrophe aid in the absence of insurance;

    1. ABIR works with the Smarter Safer Coalition and we defer to their comments. The Coalition statement includes data on pre-disaster mitigation planning, assistance and policy.
    2. Current approaches to insuring natural catastrophe risks in the United States;
      1. Current and potential future Federal, State, and regional partnerships that support private,direct insurance coverage;ABIR works with the Smarter Safer Coalition on catastrophe public policy matters. Succinctly put, the government at all levels should focus on disaster preparedness, mitigation, and emergency response. Insurers should be engaged to manage insurance risk.
      2. The potential privatization of flood insurance in the United States; andABIR supports using the Biggert Waters provisions on reinsurance risk transfer. The new law encourages the use of private reinsurance and other risk transfer products by the Federal Emergency Management Agency (FEMA) and the NFIP to reduce the future debt obligations of the US government and to promote risk based pricing in the insurance program. The recent announcement from the Dutch government that it had appointed brokers to try to place a $4 billion Euro catastrophic flood insurance program telegraphs what we think the opportunities are for the US government. The pending renegotiation in the United Kingdom offers a similar concept for the US to follow, let insurers manage insurance risk while letting the government focus on flood plain management, hazard mitigation, and emergency response.The year 2011 resulted in a record amount of property catastrophe losses around the world – an amount that exceeded $110 billion as reported by the International Association of Insurance Supervisors (IAIS). Most of those losses occurred outside the US with the mega cat losses in Japan (earthquake and tsunami), Australia (flooding, typhoon, and fire), Thailand (flooding) and New Zealand (earthquake). The IAIS reported that $64 billion or more than 60% of these mega cat losses were paid by reinsurers.xxvi The record demonstrates that insurance markets remained healthy, reinsurance remained available, and extra capacity flowed into Thailand, where local insurers had been overwhelmed by the unexpected size of the flood loss. Notable a large Canadian (Fairfax) and a large US insurer (Berkshire Hathaway) found additional market opportunities in assisting going forward with Thai flood exposure.ABIR members write flood insurance and reinsurance around the world. It’s feasible to do flood reinsurance by pooling risk globally so that risk concentrations and adverse selection problems are avoided. The impediment to flood insurance in the United States has been the politicization of insurance pricing in areas that are catastrophe prone; and the freezing out of the private market through an overly expansive national flood insurance program. The Biggert Waters Act provides incentives for additional land use and risk mitigation; and phases out the subsidized pricing scheme that was originally embedded in the flood insurance program as a temporary measure but kept being extended.

        The NFIP now carries a debt to US taxpayers of more than $25 billion. This debt will only grow unless the program’s reforms take hold. ABIR has supplied to Congressional staff comments on the type of underwriting data that a reinsurer would need in order to reinsure NFIP risk.

    ABIR Comments
    Study on Natural Catastrophes and Insurance

    Reinsurers are working with brokers and with the Reinsurance Association of America to try to win implementation of these new measures.

    7. Such other information that may be necessary or appropriate for the Report. We have no further comment.


    ABIR appreciates the opportunity to present these comments and looks forward to an opportunity to meet with the FIO team to answer questions and further engage in a dialogue about the FIO’s interests in these matters. We appreciate very much the leadership role that the FIO has in these many issues of import to international insurance group in the ABIR membership.


    Bradley L. Kading
    President and Executive Director 

    i Insurance Insider, April 2013, page 11
    ii Insurance Insider, April 2013, page 11
    iii Insurance Insider, April 2013, page 11
    iv Dowling and Partners, Perspectives on the (Re)insurance Markets, Property Cat Reinsurance…At a “Tipping Point”, October 2012

    v Evercore Group LLC Research RNR Conference Call summary, May 3, 2013 vi Goldman Sachs, RAA Annual Meeting Presentation, May 2013
    vii GC Capital Ideas, Catastrophe Bond Update, First Quarter 2013, Part II
    viii Insurance Insider, May 2013/2, page 17

    ix Insurance Insider, May 2013/2, page 17
    x Deutsche Bank, Insurance and Pensions Solutions, ILS Market Update, June 2013, page 1
    xi Goldman Sachs, RAA presentation, May 2013
    xii Dowling and Partners, IBNR #13, page 5
    xiii Dowling and Partners, IBNR #13, Page 9
    xiv Insurance Insider, May 2013/2, page 16
    xv Insurance Insider, April 2013/4, page 18
    xvi Insurance Insider, May 2013/2, page 8
    xvii Insurance Insider, May 2013/2, page 1
    xviii Insurance Insider, May 28, 2013
    xix Insurance Insider, May 2013/2, page 1
    xx Insurance Insider, April 2013, page 1
    xxi Insurance Insider, May 2013/2, page 18
    xxii Insurance Insider, Feb. 13, 2013
    xxiii Citizens Property Insurance Corporation of Florida, CFO Sharon Binnun, press release May 29, 2013 xxiv Insurance Insider, May 2013, page 17
    eLetter Commissioner Kevin McCarty to Sen. J.D. Alexander, Jan. 25, 2012
    xxvi IAIS, Natural Catastrophes and Insurance, Sebastian von Dahlen, presentation, NAIC, Dec. 1, 2012


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