TAILIEUCHUNG - Insurance Risk Study Seventh Edition 2012

The insurance sector is an infrastructural pillar of the financial services sector and the economy as a whole. It plays a key role in economic development. Several empirical studies suggest a strong correlation between the development of financial intermediaries and economic growth. According to Patrick (1966) 3 there are two, possibly coexisting, relationships between the financial sector and economic growth. The first is the case where the financial sector has a supply-leading relationship with growth, and where economic growth can be induced through the supply of financial services. The second is a demand-following relationship where the demand for financial services can. | I rm Insurance Risk Study Contents 3 Foreword 4 Global Risk Parameters 6 . Risk Parameters 7 . Reserve Adequacy and Risk 8 Modeling the Underwriting Cycle 9 New Paradigm Optimization 10 Motor Insurance in China 11 A Different View of Risk 18 Global Wind and Earthquake Risk 20 Robust Risk Management 21 Global Crop Insurance Penetration 22 Correlation Considerations 23 Global Correlation between Lines 24 Macroeconomic Correlation 25 Global Market Review 31 Afterword The Disappearing Risk About Aon Benfield Aon Benfield a division of Aon plc NYSE AON is the world s leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty facultative and capital markets. As a trusted advocate we deliver local reach to the world s markets an unparalleled investment in innovative analytics including catastrophe management actuarial and rating agency advisory. Through our professionals expertise and experience we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results please visit . Aon Benfield Foreword Twenty years ago on August 24 1992 Hurricane Andrew made landfall in Homestead Florida and fundamentally changed the insurance industry forever. It precipitated the analytic era of insurance risk management with its focus on computer simulation models and statistical quantification of risk. Results of the last twenty years show the great strengths of the new era but also some weaknesses. The industry has become both more robust and more fragile. 2005 demonstrated the new robustness despite four landfalling .

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