Disclaimer: All content of this post is from the Institute of Actuaries website.
1. Reinsurance Cost to fall 1/1
Reinsurance premiums are expected to fall by as much as 5% to 10% after another benign loss year. Deepwater horizon might have been the worst environmental disaster to date - with clean up costs of up to $40bn and combined fines of about $21bn put on BP, Transocean and Haliburton - but BP chose to self-insure and the insurance industry did not have to bear the brunt of it. There were 19 named storms in US, none of which made a landfall in US. Besides there were three major earthquakes in the year (Haiti, Chile and New Zealand) with total expected insured losses worth $17bn.
Deepwater Horizon oil spill has led to US Government planning to raise the loss cap (currently at $75million for consequential and economic damage, and $1.5bn for spill clean-up costs) to $10bn for the former category. A new reinsurance consortium as launched before Christmas which will provide unprecedented levels of liability coverage also expected to be around $10bn. The consortium will be managed by AonBenfield and involves a number of reinsurers led by Munich Re.
For related information, read on:
http://gwujeel.wordpress.com/2011/02/15/game-changer-can-a-40-billion-spill-transform-an-industry/
2. Divorce Insurance
A cover to meet costs associated with divorce has been launched in US! WedLock Divorce Insurance is sold in units, with each unit costing $15.99 per month in exchange for providing $1,250 of coverage. Policyholders can buy anywhere from one to 200 units. Every year that the policyholder continues to renew beyond the 48-month waiting period, the policy increases in value by $250 per unit. It hasn't been a huge commercial success yet, though!
more to follow....
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