Recent Catastrophe Risk Trends

Presentation by Claude Penland, Associate of the

Casualty Actuarial Society www.ClaudePenland.com

Trends We’ll Cover

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

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

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/

acfatP

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

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

New Cat Risk Underwriters

• Liberty Syndicates http://bit.ly/aA5Fjm• Indian Weather Risk Management market

expected to rapidly grow http://bit.ly/dnmGDN

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 doesn’t 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

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

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

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

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!