Pandemic risk is one of the most important tail risks for life (re)insurers and to a lesser degree, for non-life (re)insurers. Estimated losses from a 1-in-200 year pandemic event could be equal to or even greater than major property and casualty events such as a major earthquake or major tropical storm.

This article is written with the idea that both the reinsurer and the direct writer could benefit from fully exploring all appropriate assumptions and considerations directly and indirectly impacting reinsurance pricing.

Articles include:

- Life Reinsurance data from the 2011 Munich Re Survey
- New Medical Markers in Life Underwriting
- The Future of Underwriting - Catching Waves
- Interview with Paul Rutledge, president and CEO SCOR Global Life Americas
- Variable Annuity Mortality Reinsurance
- ReFocus ReCap 2012 - An Evolving Success Story
- Chairperson's Corner

Mortality analysis of applicants based on MVR records conducted by RGA and Lexis-Nexis:

A Point/Counterpoint article debating the value of screening with treadmill exercise ECGs was published in the December issue of OTR and it is posted here with the permission of On the Risk, Journal o

Life insurers are cautious about integrating medical and technological advances into their underwriting procedures in order to avoid unintended consequences to decision accuracy. Still, some recent advances are intriguing, and companies are starting to incorporate these innovations into their processes.

The latest edition of the SOA Reinsurance Section newsletter has articles on:

- Life Insurance data from the 2010 Munich Re Survey
- Social Media Goes Corporate
- Penetrating the Elusive Middle Market for Life Insurance
- An Actuary, an Underwriter and a Marketer in a Boat
- Interview with Emma McWilliam, Editor of Longevity Risk
- Reinsurance Data Management - the Good, the Bad, and the Ugly

Includes feature stories: "Income Protection 10-Hour Policy Rule Unmasked," "Bonuses and Employee Share Schemes," "CLUE - Continuing Updates and Improvements in Line with E

Standard & Poor's has downgraded the U.S. sovereign debt rating to AA+ from AAA. Implications for (re)insurers worldwide are mixed. Although there are broad economic implications, markets appear to have anticipated at least some of these, which could forestall rash or catastrophic outcomes. The long-term effects, however, could be profound.

Overview of the ReFocus conference from Ronald (Ronnie) Klein, Head of Life Reinsurance Planning and Control at Zurich Insurance Company, Ltd in Zurich, Switzerland in the SOA's "Reinsurance News" newsletter.

Presentations from various sessions at ReFocus 2011, held on February 27-March 2, 2011, in Las Vegas, NV.

In response to the growing capital needs of the Life insurance and Annuity industry, Willis Re, one of the world's leading reinsurance advisors, has established a Life Solutions Group to provide the market with advice on risk mitigation and financial leverage. Willis Re, part of Willis Group (NYSE:WSH), the global insurance broker, has appointed Rick Hodgdon, Mike Kaster and Brian Holland three highly respected reinsurance and risk management experts in New York to lead the new team.

Scottish Re Group Ltd. says it is unwinding a securitization deal and implementing a merger that should provide liquidity for ordinary shareholders.

The American Council of Life Insurers (ACLI) is part of a coalition that is asking the government of Brazil to change new reinsurance regulations.

Insurance groups from Europe, Asia and the Americas are joining to object to the new rules, according to the ACLI, Washington.

This article in the Society of Actuaries' Reinsurance News describes how a life reinsurance intermediary, possessing a combination of creativity, accounting, actuarial, reinsurance market and capital markets knowledge and experience, can bring unique mission-critical value to clients seeking reinsurance focused on special risks and/or focused on financial and tax planning objectives.

Other articles in this edition:

• State of the Variable Annuity Reinsurance Market in 2010
• Jumbo Limits: Compensating for Terrible Administration
• How To Lose a Million Bucks Without Really Trying: Oversights in Negotiating Reinsurance Treaties
• Catastrophic Claim Trends and Medical Excess Costs

...and more.

World life reinsurance gross premium revenue may have fallen in 2009, but world life reinsurance net premium revenue may have increased.

The International Association of Insurance Supervisors (IAIS), Basel, Switzerland, has published world life reinsurance market statistics in a year-end review of the reinsurance market.

A life insurance unit at Warren Buffett’s company has agreed to acquire a life reinsurance business from Sun Life Assurance Company of Canada.

Topics covered include:

• life settlement underwriting
• financial underwriting
• ReFocus
• Individual Life Experience Committee 2005-2007 Mortality Study

...and more.

Uncertain markets, slow economic improvements and changing regulations cloud recovery efforts, making underwriting discipline, pricing a key strategy.

According to a report issued by Standard & Poor’s Rating Services, life reinsurers in particular will face numerous challenges that may erode the health they’ve enjoyed. The report, "The Sluggish Economic Recovery and Emerging Regulatory Changes Are Reshaping The Life Reinsurance Landscape," maintains that a slow economy is forcing life reinsurers to deploy limited capital resources cautiously.

While traditional risk management coverages on group and individual life portfolios can be structured to make them affordable, in many instances to do so will mean the coverage will have conditions and limitations
which will make it an ineffective risk management tool. Because of this, today more and more companies are turning to AD Carve-Out reinsurance as a viable risk management solution.

Why legislate for systemic risk in an industry that apparently has none? Patrick Thiele calls for intelligent regulation informed by the unique economics of the reinsurance industry.

Presentation from the SOA 2010 Life & Annuity Symposium, May 17-18, 2010.

Presentations made in the period from 2007 through 2009 are available for viewing. Among the topics in 2009:

• Betsy Sears - Hepatitis B & C
• Dr. Robert Baird - Sleepless in Dallas
• Radford Diastolic Dysfunction
• Underwriting Crohn' Disease
  

Reinsurance rates for most lines of business decreased on the January 1, 2010 renewal. The Guy Carpenter World Catastrophe Rate on Line (ROL) Index decreased by 6 percent in reaction to a swift and substantial recovery in the capitalization of the reinsurance sector. The combination of the rally in investment markets, much reduced catastrophe loss activity in 2009 and recessionary effects on demand for
direct and reinsurance programs resulted in an excess of supply and increased competition. Movements in pricing occurred against a background of exposure adjustments, model revisions, program changes and other developments.

Topics in this edition include:

• Obesity - Treatment and Subsequent Risk Assessment
• Critical Illness Reinstatement Products
• Anti-Discrimination Law - The Portuguese Experience
• What Does Risk Feel Like? Insights From Behavioural Economics - Part I

Insurers’core activities do not pose a systemic risk. This is the conclusion of a study launched by the Geneva Association, the international think tank and global CEO platform. It recommends that regulators and policymakers focus on risk activities and not on institutions when introducing new regulatory regimes.

Reinsurers are facing added complexities and challenges never encountered before, such as pleasing stricter rating agencies and keeping track of layered business transactions. However, companies such as Transamerica Reinsurance and Guy Carpenter use a number of sophisticated technologies and processes to better assess and manage the range of risks now facing them. Find out how.

Demand for life and health reinsurance is expected to rise as direct writers look to relieve pressure on their capital after the financial crisis, observers say.

An important contribution from a strong and viable insurance industry is to help foster a sound economy. Insurers and their reinsurers have a shared responsibility to sustained, solid financial performance in order to be able to protect critical assets for years to come.

The September 2009 issue looks at:

• Life Reinsurance Data from The Munich American Survey By David M. Bruggeman
• What Reinsurers and Cedants Can Learn from Uncle Rex and the Bulls By Rick Flaspöhler
• Reinsurance Modernization – A New World ViewBy Daniel W. Krane and Elizabeth A. Diffley
• Life Reinsurance: Capacity and Concentration of Risk Survey Analysis By William J. Briggs, Gaetano Geretto and Robert B. Lau
• Enhancing the Benefit: How quality successful limited-benefit health plans answered the demand for a more robust product By Curt A. Wieden
• American Academy of Actuaries Stop Loss Risk-Based Capital Work Group is Reviewing the Potential Need for Changes in the RBC FactorsBy Michael L. Frank

The Committee on Life Insurance Research, Product Development Section, and Reinsurance Section are pleased to make this report available. Performed by the Ernst & Young team of Thomas Crawford, Richard de Haan and Chad Runchey, this research reviewed literature on longevity risk. The paper summarizes results and addresses topics including the emergence and quantification of longevity risk; current and future risk management techniques; and products currently in the market that are exposed to longevity risk. The appendices include a summary of each paper reviewed for the study.

This report presents the results of a survey conducted by the Society of Actuaries Mortality and Underwriting Survey Committee in July of 2008.

Life and personal accident (PA) reinsurance renewals sustained significant rate reductions at the April 1, 2009 renewal — in some cases as low as 10 percent. Average rate on line (ROL) was down 3.8 percent, excluding programs with large rate changes for reasons not directly related to market conditions. For example, companies with reduced subject risk due to the impact of the global financial crisis had ROL reductions that were even greater. Even layers with light losses were treated gingerly, with level pricing or slight increases year-over-year. The markets remains tipped to the advantage of cedents, despite broader market conditions that might be expected to push prices higher.

The life insurance industry enters 2009 facing an economic environment and a business outlook that are profoundly different from one short year ago. While every year presents catalysts for change, 2008 will go down as one of extreme, involuntary change as companies dealt with the suddenness and severity of the financial crisis. What is more, the traditional playbook does not appear to offer many options on how to manage through the challenges.

From the October '08 edition of The ReSource, Canada Life's newsletter.

Presentation at ReFocus 2009.

Article by David M. Holland, FSA, MAAA in the Society of Actuaries' Reinsurance News newsletter (February 2009).

The global reinsurance industry has remained substantially unscathed by the unprecedented turmoil in the global capital markets, with a capital base still largely intact and liquid, although access to new capital in 2009 will become more difficult and expensive in the current economic climate, according to a new report from Willis Re, the reinsurance broking arm of Willis Group Holdings (NYSE: WSH), the global insurance broker.Willis Re’s “1st View,” its quarterly reinsurance market report, examines rate movements across numerous territories and product classes and includes detailed analysis from Willis Re’s product line experts. Bearing the title “Capital Rules,” the report finds evidence that, with January 1 renewals, reinsurers are taking meaningful price increases in capital-intensive lines of business, such as the U.S. Nationwide Catastrophe business.

According to the latest Swiss Re sigma study, world insurance premium income grew 3.3% in real terms in 2007, reaching USD 4 061bn. This growth was primarily driven by the life business in industrialised and emerging markets and to a lesser extent by the non-life business in the emerging markets.

UPDATE: The statistical appendix updates premium volumes from the world insurance sigma published earlier this year.

Underwriters are commonly thought of as pseudo-doctors, unraveling complex medical histories and risk factors and translating these into life expectancies. Or as pseudo-accountants, reviewing pages of financial statements and tax returns in order to determine (to the penny!) how much insurance is warranted on an individual. Yes, underwriting involves both of those skill sets but what is often overlooked is perhaps the most important facet of underwriting. (Canada Life Reinsurance)

PartnerRe's Patrick Thiele explains how the capital markets and reinsurance markets respond to shock losses.

In May of 2006 the Life Insurance Mortality and Underwriting Survey Committee of the SOA surveyed both reinsurers and direct companies about their practices with respect to making business decisions in the underwriting process. This article from the SOA's Reinsurance News highlights the comparison of the results of the two surveys as outlined in detail in Appendix 2 of the Direct Company Survey. Familiarity with the surveys and their definitions is assumed.

Double-digit health care cost increases may have tapered off, but some organizations continue to struggle with high premiums, low employee engagement and mixed employee response to account-based health plans. Other organizations, however, are gaining competitive advantage by managing their programs aggressively — with a focus on the causes that drive ongoing cost increases.

Check out what high-performing companies are doing to get employee buy-in and improve their bottom line