|
Holborn Estimates
 |
| |
Published Estimates,
Events Considered
Separately |
Estimated Ultimate,
Events Considered
Together |
|
| Tropical Storm Bonnie |
$300Mn |
$300Mn |
| Charley |
6Bn – 7Bn |
7Bn – 10Bn |
| Frances |
3.5Bn – 4.5Bn |
4Bn – 6Bn |
| Ivan On-Shore |
4Bn – 6Bn |
5Bn - 8Bn |
| Jeanne On-Shore |
4Bn – 8Bn |
8Bn – 14Bn |
| Caribbean, Puerto Rico, Platforms |
500Mn - 2Bn |
500Mn - 2Bn |
| Loss Adjustment |
NA |
2Bn - 2.5Bn |
|
| Total Gross |
$20Bn - $25Bn |
$30Bn - $40Bn |
|
|
| Florida Residential* |
$19Bn - $26Bn |
| Florida Other |
5Bn – 7Bn |
| Adjacent States Homeowners |
2.5Bn – 3.5Bn |
| Adjacent States Other |
0.5Bn – 1.0Bn |
| Other States |
0.5Bn – 1.0Bn |
| Off-Shore (US insurers only) |
0.5Mn – 2Bn |
| Loss Adjustment |
2.0Bn – 2.5Bn |
|
| Total Gross |
$30Bn – $40Bn |
|
*Note: includes commercial habitational
|
| |
2003 DWP |
Total
Market Share |
Voluntary
Market Share |
|
| 8 National Personal Companies |
$2.10Bn |
42% |
54% |
| Regional and Other Multi-Line Companies |
1.03Bn |
21% |
26% |
| 20 Florida HO Specialists |
0.75Bn |
15% |
19% |
| Citizens Insurance |
1.10Bn |
22% |
0% |
|
| Florida HO Market |
$5.0Bn |
100% |
100% |
|
|
| |
Insurers’
Gross Losses |
FHCF Cessions |
Reinsurance
Market Cessions |
Insurers’
Net Losses |
|
| National Personal Companies |
$7 – 15 |
$1.0 – 3.5 |
$0.5 – 2.0 |
$7.0 – 10 |
| Florida HO Specialists |
2.5 – 5 |
0.5 – 2.0 |
0.5 – 2.5 |
2.0 – 3.5 |
| Regional and Other Multi-Line |
7 – 10 |
1.0 – 2.5 |
0.5 – 2.5 |
3.5 – 6.5 |
| Citizens Insurance |
1.5 – 3.0 |
0.5 – 1.5 |
0 – 0 |
01.5 –2.5 |
|
Total Florida Homeowners
($Billions) |
$18 – 30 |
$4 – 8 |
$2 – 6 |
$11 – 18 |
|
|
| |
Net Losses |
12/31/03 PHS |
Florida
2003 GWP |
Countrywide
2003 GWP |
|
| National Personal Companies |
$12 – 18 |
100+ |
$10.7 |
135.0 |
| Florida HO Specialists |
2.0 – 3.5 |
0.25 |
0.75 |
0.75 |
| Regional and Other Multi-Line |
5 – 8 |
250+ |
16.1 |
314.5 |
| Citizens Insurance |
1.5 – 2.5 |
1.8 |
1.1 |
1.1 |
| US Primary Market |
11 – 18 |
359.7 |
30.2 |
451.3 |
|
| FHCF |
4 – 8 |
5.5 |
1.5 |
1.5 |
| Property Reinsurance Market |
4 – 10 |
50+ |
2 – 3 |
10 – 20 |
|
| Total Market ($Billions) |
$30 – 40 |
400+ |
34+ |
460+ |
|
|
Accident Year |
Net Earned Premiums |
Estimated Ultimate
Loss Ratio |
Average Renewal
ROL
Increase/Decrease |
|
2000 |
$4.0Bn |
73% |
-10% |
2001 |
$4.2Bn |
153% |
+10% |
(2001 ex 9/11) |
|
(73%) |
|
2002 |
$4.9Bn |
40% |
+35% |
2003 |
$5.2Bn |
45% |
-5% – -10% |
| |
Company Loss Estimates as of October 18th ($ Millions)
* Pre-Tax
** Pre-Tax and Does not include Montpelier Re & Olympus Re
Includes Typhoons **
Market Statistics
|
| Description |
Amount (000's) |
|
| Florida Total DWP HOMP |
$3,848,066 |
| Florida Total DWP CMP* |
$1,838,335 |
| Florida Total DWP CMP (NL) |
$1,088,575 |
| Florida Total DWP CMP (L) |
$749,760 |
| Florida Total DWP FOMP |
$21,013 |
| Florida Total DWP Allied |
$782,459 |
| Alabama Total DWP HOMP |
$818,856 |
| Alabama Total DWP FOMP |
$447,535 |
| MississippiTotal DWP HOMP |
$476,292 |
| MississippiTotal DWP FOMP |
$11,095 |
| Countrywide Total DWP CMP* |
$31,464,820 |
| Countrywide Total DWP CMP (NL) |
$19,042,178 |
| Countrywide Total DWP CMP (L) |
$12,422,642 |
| AlabamaTotal DWP All Lines |
$5,676,778 |
|
* Includes both liability and non-liability lines
Catastrophe Market Capacity
The property catastrophe reinsurance capacity will again hit another record in 2005 with $2.4Bn in
estimated available capacity. However, it appears that the cost to attract the final part of this capacity, is
increasing. The chart and following graph details the breakdown by market from 1992 to 2005.
Market Conditions: Reinsurance: New Capacity – Hedge Funds
 A number of facilities with capital primarily from hedge funds with various pools of investors are
becoming more involved in traditional Property Catastrophe reinsurance. Located mostly in
Bermuda, these operations have, up to now, focused on Cat Bonds, Industry Loss Warranty covers
and Retrocessional business. Six are noted below:
| Name |
Investor |
| Glacier Re |
Soros and HBK Investment |
| CIG Re Ltd. |
Citadel Investment Group |
| Poseidon Re |
Nephila Capital Ltd. |
| Not Known |
Cooper Neff Advisors (BNP Paribas) |
| Not Known |
Richie Capital |
| Not Known |
Cochran Caronia |
Reasons for expanding:
- Expertise has already been developed through Hedge Fund investments in catastrophe bonds.
- Ease of entry: Model driven, low expense, few larger deals.
- Diversification: Little correlation to swings in equity and bond markets (or so believed).
Hedge Funds have cash and will collateralize assumed reinsurance risk through 114 Trusts.
Easy exit strategies: With success, Hedge Funds can IPO the Company or sell the stock for a gain at
lower long-term capital gains rates than corporate income.
Hedge Funds will bring additional capital to the market and encourage softer Catastrophe rates,
although some are questioning their long-term commitment should rates fall or a loss occur.
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