Daily Willis Review- October 26,2017

Global reinsurance market remains strongly capitalized: A.M. Best
Despite challenging conditions, the global reinsurance market remains strongly capitalized, based on an aggregate basis, A.M. Best has reported.

The ratings agency used its updated Best’s Credit Rating Methodology (BCRM) and its new building block approach as part of its analysis.

It found that approximately two-thirds of the rated population has the strongest category of balance sheet strength and that no companies fell below the strong category.

This is mostly due to the reinsurers’ surplus growth, which stems from generating positive cash flows and loss reserve redundancies, managing high quality investment portfolios, and maintaining appropriate reinsurance structures to protect surplus, the report said.

Steven M. Chirico, a Director in A.M. Best’s property/casualty ratings division, said: “The analysis of the global reinsurance market using the building-block approach accentuates the value of the approach in that is based on the convergence of multiple analytical assessments that result in a published rating.”

Munich Re records Q3 losses of $3.78 billion
Munich Re has reported overall losses of €3.2 billion ($3.78 billion) for Q3 from hurricanes Harvey, Irma and Maria and expenditures from other natural catastrophes.

The three hurricanes will make up the bulk of the losses for the quarter, with the loss expected to be €2.7 billion ($3.19 billion). Other natural catastrophe losses included those from the Mexico earthquakes.

The global reinsurer will post a loss of €1.4 billion ($1.65 billion) for the period from July to September 2017 and now projects a small profit for the full year 2017.

Jörg Schneider, Chief Financial Officer of Munich Re, said: “High losses from severe natural catastrophes are part and parcel of our business; that is why we are here.

“Our capital base remains very strong. We will continue to offer our clients full reinsurance capacity.

“Moreover, Munich Re has enough capital to take advantage of the opportunities this exceptional situation provides in terms of profitable growth.”

Beazley reports rise in data breaches due to social engineering
A big rise in social engineering attacks – scams involving deception – are a growing cause of data breaches, a report by insurer Beazley has found.

It’s third quarter 2017 Breach Insights report found fraudsters use social engineering attacks to prey on employees’ role within their companies to orchestrate disclosure of information or the wire transfer of money to criminals.

These can occur in the months leading to tax filing deadlines when fraudsters target emails to a specific company employee to forward copies of all the company’s W-2 forms, resulting in criminals using false tax returns to claim refunds.
Criminals also impersonate a trusted party such as a company executive or payment system vendor to cause a fraudulent payment.

In Q1 to Q3 of 2016, social engineering attacks accounted for 1% of incidents handled by Beazley Breach Response (BBR) Services, but this increased to 9% of the 2,013 incidents reported to BBR services for the same time period in 2017.

For the first nine months of 2017, the predominant cause of data breach remained hacking and malware, accounting for 34% of the total reported. This included cyber extortion, which made up 30% of the total 34% recorded.

PERILS posts final loss estimate for Central Italian earthquake of $245.8 million
Zurich-based PERILS has announced a final loss estimate of €208 million ($245.8 million) for the earthquakes that impacted Central Italy between October 26 and 30 2016.

This is a revised estimate from an earlier assessment which was issued on January 26, 2017, three months after the event, that put the cost at €125 million ($147.7 million).

The series of earthquakes impacted the regions of Lazio, Marche and Umbria with moment magnitudes of Mw 5.4, 5.9 and 6.5, according to the Italian Institute of Geophysics and Volcanology.

Based on the PERILS’ loss estimates and the Italian Civil Protection Agency, which estimates total economic losses at €16.5 billion ($19.5 billion), only 1.3% of the overall economic loss was insured.