Catastrophe Management We actively monitor and manage our catastrophe risk accumulation around the world such as...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Catastrophe Management We actively monitor and manage our catastrophe risk accumulation around the world such as setting risk limits based on probable maximum loss (PML) and purchasing catastrophe reinsurance. The table below presents our modeled pre-tax estimates of natural catastrophe PML, net of reinsurance, at December 31, 2019, for Worldwide, U.S. hurricane and California earthquake events, based on our in-force portfolio at October 1, 2019 and reflecting the April 1, 2019 reinsurance program (see Natural Catastrophe Property Reinsurance Program section) as well as inuring reinsurance protection coverages. According to the model, for the 1-in-100 return period scenario, there is a one percent chance that our pre-tax annual aggregate losses incurred in any year from U.S. hurricane events could be in excess of $2,685 million (or 4.9 percent of our total shareholders' equity at December 31, 2019). These estimates assume that reinsurance recoverable is fully collectible. (in millions of U.S. dollars, except for percentages) 1-in-10 1-in-100 1-in-250 a . Worldwide Annual Aggregate $ $ Chubb Modeled Net Probable Maximum Loss (PML) Pre-tax U.S. Hurricane 1,873 3,804 6,227 % of Total Shareholders' Equity Annual Aggregate 3.4% $ 6.9% $ 11.3% $ Chubb % of Total Shareholders' Equity 1,089 2,685 4.698 Worldwide losses are comprised of losses arising only from hurricanes, typhoons, convective storms and earthquakes and do not include "non-modeled" penis such as wildfire and flood. U.S. Hurricane losses include losses from wind and storm-surge and exclude rainfall. California earthquakes include fire-following perils California Earthquake Single Occurrence 2.0% S 4.9% $ 8.5% $ Chubb % of Total Shareholders' Equity 129 1,338 1.513 0.2% 2.4% 2.7% The above estimates of Chubb's loss profile are inherently uncertain for many reasons, including the following: . While the use of third-party catastrophe modeling packages to simulate potential hurricane and earthquake losses is prevalent within the insurance industry, the models are reliant upon significant meteorology, seismology, and engineering assumptions to estimate catastrophe losses. In particular, modeled catastrophe events are not always a representation of actual events and ensuing additional loss potential; There is no universal standard in the preparation of insured data for use in the models, the running of the modeling software and interpretation of output. These loss estimates do not represent our potential maximum exposures and it is. highly likely that our actual incurred losses would vary materially from the modeled estimates; and The potential effects of climate change add to modeling complexity. H 3. What are the ranges of values? What statistic is tabulated? 4. How do potential loss amounts compare to total written premium and shareholder surplus? 5. What types of events potentially cause the greatest losses? Catastrophe Management We actively monitor and manage our catastrophe risk accumulation around the world such as setting risk limits based on probable maximum loss (PML) and purchasing catastrophe reinsurance. The table below presents our modeled pre-tax estimates of natural catastrophe PML, net of reinsurance, at December 31, 2019, for Worldwide, U.S. hurricane and California earthquake events, based on our in-force portfolio at October 1, 2019 and reflecting the April 1, 2019 reinsurance program (see Natural Catastrophe Property Reinsurance Program section) as well as inuring reinsurance protection coverages. According to the model, for the 1-in-100 return period scenario, there is a one percent chance that our pre-tax annual aggregate losses incurred in any year from U.S. hurricane events could be in excess of $2,685 million (or 4.9 percent of our total shareholders' equity at December 31, 2019). These estimates assume that reinsurance recoverable is fully collectible. (in millions of U.S. dollars, except for percentages) 1-in-10 1-in-100 1-in-250 a . Worldwide Annual Aggregate $ $ Chubb Modeled Net Probable Maximum Loss (PML) Pre-tax U.S. Hurricane 1,873 3,804 6,227 % of Total Shareholders' Equity Annual Aggregate 3.4% $ 6.9% $ 11.3% $ Chubb % of Total Shareholders' Equity 1,089 2,685 4.698 Worldwide losses are comprised of losses arising only from hurricanes, typhoons, convective storms and earthquakes and do not include "non-modeled" penis such as wildfire and flood. U.S. Hurricane losses include losses from wind and storm-surge and exclude rainfall. California earthquakes include fire-following perils California Earthquake Single Occurrence 2.0% S 4.9% $ 8.5% $ Chubb % of Total Shareholders' Equity 129 1,338 1.513 0.2% 2.4% 2.7% The above estimates of Chubb's loss profile are inherently uncertain for many reasons, including the following: . While the use of third-party catastrophe modeling packages to simulate potential hurricane and earthquake losses is prevalent within the insurance industry, the models are reliant upon significant meteorology, seismology, and engineering assumptions to estimate catastrophe losses. In particular, modeled catastrophe events are not always a representation of actual events and ensuing additional loss potential; There is no universal standard in the preparation of insured data for use in the models, the running of the modeling software and interpretation of output. These loss estimates do not represent our potential maximum exposures and it is. highly likely that our actual incurred losses would vary materially from the modeled estimates; and The potential effects of climate change add to modeling complexity. H 3. What are the ranges of values? What statistic is tabulated? 4. How do potential loss amounts compare to total written premium and shareholder surplus? 5. What types of events potentially cause the greatest losses?
Expert Answer:
Answer rating: 100% (QA)
3What are the ranges of values What statistic is tabulated The table provided in the Catastrophe Management section of the report presents Chubbs modeled pretax estimates of natural catastrophe Probab... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
How do insurance companies manage credit risk and liquidity risk?
-
We will do this in 2 steps. You will compare 2 companies. All the following must be provided for both companies. I prefer showing both in the same charts/graphs, but they can be shown separately. We...
-
Determine CPI, ETC (1), and EAC. Activity Total PV 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1 6 6 2 20 10 10 3 30 9 6 6 6 3 4 20 8 2 5 5 5 16 4 4 4 4 6 18 9 9 7 8 4 4 Status Report: Ending Period 5 Task %...
-
In Exercises 7683, use a graphing utility to graph the function. Use the graph to determine whether the function has an inverse that is a function (that is, whether the function is one-to-one). f(x)...
-
The following events occurred for a company during the last two months of its fiscal year ended December 31, 2014: Nov. 1 Paid $4,500 for future newspaper advertising. 1 Paid $7,800 for insurance...
-
In January 2009, approximately how many employees did Satyam Computer Services employ?
-
The streamlines for an incompressible, inviscid, two-dimensional flow field are all concentric circles, and the velocity varies directly with the distance from the common center of the streamlines;...
-
Harriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has...
-
Examine each of the following independent situations and state whether control does or does not exist. Where there is control, you are to state which party controls the entity. Give reasons for your...
-
During 2020, your clients, Mr. and Mrs. Howell, owned the following investment assets: Investment Assets Date Acquired Purchase Price Brokers Commission Paid at Time of Purchase 300 shares of IBM...
-
For each transaction, state what account must be debited with the amount and what account must be credited with the amount March 1: Marquet Corporation issues common stock for $10M cash Debit:...
-
The following information relates to Skysong Ltd.'s inventory transactions during the month of August. Units Cost/Unit Amount August 1 Beginning inventory 15 $920 $13,800 6 Purchase 35 $736 25,760 00...
-
1. Given f(x) = 5-10x2 2x-8 All horizontal intercepts: 9 Vertical intercept: find the following: Horizontal asymptote: Vertical asymptote(s): Domain:
-
A) B) Given cos(t)= 15 4 15 4 where T
-
How do systemic inequalities and power dynamics contribute to the perpetuation of social conflict in modern societies, and what theoretical frameworks best explain these dynamics ?
-
There is a bonus with the following characteristics: nominal value $98.650.000 annual coupon rate 4.5% term 5 years, tir 6.5% A) Calculate the price of the bond assuming it is zero coupon B)...
-
(8) Determine how much you will still owe on the house after 10 years and after 15 years; use the unpaid loan balance formula Po balance P after N years. (1-(1+12) -12(30-N) that calculates your...
-
Reconsider Prob. 1474. In order to drain the tank faster, a pump is installed near the tank exit as in Fig. P1475. Determine how much pump power input is necessary to establish an average water...
-
What types of plans and decisions most likely require board of director involvement, and why? What types of decisions and plans are not appropriate for board involvement, and why?
-
Identify and discuss the steps in the creative process. What can an organization do to increase employees creativity?
-
How would you use Miles and Snow typology theory to advise Activision Blizzard on the best way to maintain its leadership in the videogame market?
-
A mixture of benzene and monochlorobenzene is to be separated into almost pure products by distillation. Determine an appropriate operating pressure at the top of the tower.
-
The feed to a distillation tower consists of \(14.3 \mathrm{kmol} / \mathrm{hr}\) of methanol, \(105.3 \mathrm{kmol} / \mathrm{hr}\) of toluene, \(136.2 \mathrm{kmol} / \mathrm{hr}\) of ethylbenzene,...
-
In a reboiled absorber, operating as a deethanizer at 400 psia to separate a light hydrocarbon feed, conditions at the bottom tray are: Liquid Phase Molar flow = 1, \(366 \mathrm{lbmol} /...
Study smarter with the SolutionInn App