Terms and reinsurance God

Newhouse is his 52-story South Tower at the World Trade office. United Airlines flight No. 175, terrorists killed the pilot, fly a plane straight toward the south tower’s 24th floor, and Newhouse did not notice the impact of sound. Time Newhouse manages the U.S. Best of the insurance company’s operations, insurance is a good of another insurance company. Reinsurance company actually guarantees for insurance companies to provide insurance companies, when faced with hurricanes or earthquakes, the insurance company will pay a large compensation, then they will claim to the reinsurer.

ordinary people know little about reinsurance companies, because they will not deal with these companies. Reinsurance companies are generally financial strength, their main concern was that never happened, if the loss occurred on a huge disaster. Sometimes re-insurance companies will be sudden disaster and made a loss, that is called God in this industry terms. Reinsurance companies to these emerging risk all liability, past losses to reinsurers increased by. To reduce risk, reinsurance companies are working to reduce these terms of God.

British Lloyd’s is the inventor of the modern insurance industry, they will each publish a list of Catastrophe Scenario. This list is a lot of big disaster prediction, and in 2001, they have also predicted the two planes crashed into the city, causing a lot of action for damages, including the fuselage insurance claims, property claims and a variety of personal injury compensation. Lloyd’s risk manager Trevor – Maynard said, people did not see before will not believe the risk exists, such as you try to make people believe there is a risk: the terrorists are learning to fly a plane, and ready to open toward the building, their reaction is usually look callous.

good up to the insurance company’s office is located in South Tower of the World Trade 49-54 layers. Its customers, that is, the insurance company’s staff who have been accustomed to analyzing risks and benefits, in their view the World Trade Center is very safe, there is no danger of the equipment, in case of fire, firefighters immediately rushed to the history the fire never spread to six more. The Newhouse also believes that his in the World Trade Center more than 40 customers, will only have eight or six also suffered the same loss.

insurance companies usually describe such a high incidence of events: emergence of high probability, forecasting is easy, simple claims. For falls, such legal proceedings or fire disasters, historical trends can be well predicted by the probability of occurrence. But people can not predict such a man-made events 911.

good of the insurance company a total of 911 attacks killed 29 people. When the plane hit the building, most of the staff downstairs in the building or not, the CEO is also good up to the insurance business trip to Europe, Newhouse is at the highest level of employees. When American Airlines Flight 11 crashed into the north tower, Newhouse inform all staff quickly evacuated. 1993 North Tower, World Trade Organization when the explosion occurred, good up to the insurance company here, and his staff at the moment do not realize how dangerous, would not think the building will collapse. When Newhouse rushed downstairs, the two buildings is still alive, just hit the north tower where raging fire burning. Newhouse smooth boarded the ferry on the Hudson River, which is the building he saw the following people are still wandering around, when the ferry back, these people are still there. At this point, South Tower began to collapse, and accelerate the fall. Until this moment, people only believe anything can happen, fear drives people to distance running. Newhouse then looked across the river all the sudden, terrified.

1998 fall, I began the world’s largest, a reinsurance company. Park Avenue in the vicinity of a meeting, some people complain more and more difficult to do this line of reinsurance, he said that we need now is a disaster, although a joke, but true. I mentioned that Bangladesh was a hurricane had just happened, it was a high incidence of hurricanes were. But he said this is useless, because there’s very little property insurance.

in the reinsurance industry jargon, the event of a disaster is called a loss event, the loss if a disaster takes several large reinsurance companies shared claims are known as industry loss events. Reinsurance company that is afraid and needs of the disaster. The world’s first reinsurance company in Germany, Cologne Reinsurance Company, and its formation is due to a 1543 fire, the fire that destroyed a quarter of the city of Hamburg. A loss event occurs, the insurance company can advise the significance of reinsurance, such reinsurance company can increase charges to attract more funds. According to another insurance company for providing consulting services to Dowling & Partners research, 1992, when the hurricane swept through South Florida, the emergence of eight new reinsurance companies, their total assets reached $ 2.9 billion. Although hurricanes are frequent, but then the insurance company or call it a small probability event, after all, a place up to 10 times instead of thousands. And the accident is different from the past ten can not predict this situation to the possible loss.

then occurred resulting in $ 2.5 billion loss Andros hurricanes, and with the arrival of computer technology to promote the insurance companies and reinsurance companies a huge breakthrough in technology, they began to rely on meteorology and seismology more accurate forecast disasters, such as estimates of the storm trajectory, fault zones and seismic intensity. Despite the fact that more and more advanced design of the model, but the reality is still difficult to be accurate to predict.

911 after the attacks, reinsurance margins, there are eight established reinsurance company with total assets of $ 8.6 billion, and as Hurricane Katrina, Hurricane Rita, Hurricane Wilma also has occurred, there are five companies to enter the reinsurance industry. Members of the industry to increase profits diluted, and then the insurance company had underestimated the risk. Swiss Reinsurance Company David – Brash said that in this period, even if the insurance companies know that there may be a huge disaster, they will not increase premiums. People are always based on the fact that you can feel the risk is measured, not according to what may occur in the future forecast. Brash in charge of the world’s second largest reinsurance company’s risk management business. He said that usually predicted by the model results and people feel there is a big discrepancy, the model shows a high risk and the insurance company will not be accepted. Data not only by terrible for the insurance company to pay a higher premium, unless a major disaster.

Munich Re is the world’s largest reinsurance company, Hector? Terui Lao Wei Chomsky is the company’s underwriting charge. 911 attacks occurred in the afternoon, the media company’s shareholders also want to know how much loss of Munich Re. Terui Lao Wei Sharansky said that to get these data, we must contact the broker, but Ben Fu Aon Reinsurance and Guy Carpenter reinsurance are then the World Trade Center, and did not know whether they are still alive. Before the end of that week, Munich Re has been preliminary data, the final in ten out of a meeting to announce a total loss of $ 2.2 billion.

reinsurance contract is filled with a variety of exemption clauses, 911 before the attacks, terrorism risk is not taken seriously, and therefore were not included in the exemption clause. Most insurance companies will then update the protection of about 11, 200211 date, all reinsurance companies not in the underwriting risk due to the emergence of terrorism. Terui Lao Wei Sharansky said that terrorism is not an accident, it is a handful of angry people who launched a premeditated, there is no guarantee one will not happen ten times in such a thing, like this – bin Laden’s people can not use mathematical models to estimate.

reinsurance companies usually assume that they can only confirmed the risk, but the market often force them to compensate all the risks. Model can predict some of the small probability risks, such as hurricanes, earthquakes, oil spills, but impossible to predict all the risks. Terui Lao Wei Sharansky said there was no model to predict the aircraft collision, unless such things happen often. In the past no one would think a plane hit the building caused the claim, although theoretically such a possibility. But when the moment of the disaster, the model error term occurs, it is no longer theoretical or unthinkable a.

Newhouse said that the reinsurance industry is to compensate all the losses after a disaster, then we modify the re-insurance contract. Until 60 generations ago, there were no time compensation terms (that is, in a certain period of time, damage caused by hurricane claims), and now the standard is 96 hours. In Newhouse 35 reinsurance brokers career, each a major disaster are of great significance to him. He said, if you want accurate pricing for an event, or you want in this industry based, have enough capital, then you must accurately define the event. When asked, why re-insurance company is not 1993 when the World Trade bomb attack, terrorist activities, improve compensation premiums, he said, that attack impact is too small, not worth the effort to research and defense, only when the threat is sufficient large, people will take some action.

Swiss Reinsurance Company’s global headquarters is located in the beautiful Lake of the Suez. Brash and his colleagues Andreas – Shilafute come together after work, usually the station. 20059, in a walk in which they talked about the cultural factors.卡特里娜丽, Rita and Wilma which there are several hurricane damage is much higher than expected, with a well developed storm models have been unable to predict, but this is clearly not the wind speed reasons.

perhaps the Gulf of Mexico as a whole should be risk assessment. Louisiana coastal mangrove swamp is an important barrier against the storm, is now being used as fertilizer cut, and that a serious shortage of construction of the dam area. Reinsurance companies, and predicted the company is more focused on technology and science, they ignore the economists and sociologists from the warning.

catastrophe risk modeling agencies Eqecat model development director David – Smith said, the development of their data has been very full, but still can not get a perfect forecast. Hurricane Katrina with the loss of the same model to estimate the actual burden of compensation for the last customer has a very large gap. Reinsurance companies with the same, Eqecat also ignored the dam factor. Before the arrival of the hurricane, the quality of these buildings to be much worse than imagined, had to rebuild the levees after the hurricane, and reminders needed for reconstruction of high prices of labor and materials. To make the model more accurate, Smith began consulting sociologists and economists.

as Swiss Re Brash and Tel Swift and social scientists have begun to make contact and set two goals: first, a better understanding of social factors, and their underwriting risk; two before compensation is forced to make a better protection of the insured assets.

insurance and reinsurance also exist in a delicate balance, or loss if the risk is not frequent enough, then people will not buy insurance, but if the risk occurs too frequently or if the loss is too large, the insurance company will not bear the compensation costs, which insurance companies and insurance companies have been negative. So the insurance company will launch what they call the “reduced losses”: that is to encourage potential customers to prevent their destruction of property, or a signal is passed, some very dangerous behavior, if continued, will not be compensation, insurance companies will collapse.

this end, the Swiss Re insurance company will not talk about climate risks, and renamed the climate change. Brash said that in many parts of the climate risk is only part of the problem, the other is economic development, for example, we in the wrong place the wrong way for construction, the insurance requirements of these errors will not be accepted. He also cited the Disaster Research Center University of Kiel, Germany, the experts say: Nature does not break anything, and if damage occurs it is not nature’s fault, but the fault of our humanity.

city of Sundsvall in Sweden built entirely of wood, later destroyed in a fire. Reinsurance company warned the Swedish insurance company, if the reconstruction is still the future use of wood, will not receive compensation, since the city began to use stone as a building material. Reinsurance industry is negotiated between culture and reality tool that lets the community know what kind of habits are not sustainable.

Swiss Reinsurance Company also recently co McKinsey & Company, the European Union and some environmental groups to develop the environment to adapt to economics, urban planners use this method to encourage the construction of the city a reasonable manner. A British study found that the port of Hull, where each generation due to climate change, the loss was $ 17.0 million, because economic growth can be generated for each loss is as high as $ 23 million, for here is how the construction of the city after more than twenty years the levels of carbon dioxide in the air is more important. New Orleans Ante Ji company to do a similar study in the Gulf Coast to take appropriate measures, such as to strengthen construction standards, restore wetlands and offshore sand island in the vicinity of the construction of dams and chemical plants to enhance levels of high-risk areas such as defense , can effectively reduce hurricane losses. While these measures may increase costs and short-term drag on economic development, but then the insurance company must have a long-term plans.

reinsurance companies to the public as the original insured, they want the public to understand, even if the cast all risks, nor will be able to get compensation, because then the insurance company has the contract to the exclusion of many known risk . Munich Reinsurance Company, said it bought the insurance companies continue to complain, although insurers and reinsurers have sufficient funds, but they do not want to take on more risk, such as damage to corporate image is not guaranteed to be plagiarism or intellectual property rights arising from losses

with many reinsurance companies, Munich reinsurance called non-normal business interruption insurance: If for special reasons, the production of key components of the product supply disruptions, the producer will receive compensation. This three after a major earthquake in Japan, Terui Lao Wei Chomsky began to assess the possible amount of compensation, when she found a technology company from Louisiana has been discontinued because all the chips run out. (status)

While reinsurance companies have started working for compensation, but given the complexity of global supply chain, it is difficult to know exactly how much global business interruption losses. Japan’s earthquake and a technology company in Louisiana, two seemingly unrelated risk, now have contact. When a disaster when the reinsurer is like a trash can to deal with all the systemic risk. Reinsurance companies have not yet worked out how to deal with these business disruptions, Terui Lao Wei Sharansky said, the easiest way is no compensation.

good Newhouse is now up to the reinsurance company’s chairman, in his office there is a monument to pay homage to the dead in the 911 attacks in 29 employees. When asked how to treat the issue of Japanese tsunami Stone (Japanese tsunami affect even the highest placed in the monument, warning future generations more than the house built in stone, the Japanese economy after World War II explosive development of these stones are ignored warning began in the rivers and coastline such a dangerous place to build houses), Newhouse said, the stone will always stay there, but people will build a house below, as they believe that only others will be drowned rather than their own, This is human nature.


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