Scope and Purpose:

• The purpose of this research is to explore the impact of catastrophe risk (natural and man-made), on the financial markets and in particular on the risk management of insurers and reinsurers. 
• The scope includes (a) building code and land use, (b) insurance regulation, pricing and coverage forms, (c) use of capital markets and reinsurance. These must be addressed in a comprehensive, accurate, and up-to-date manner. 

Resources: during this semester, there are three speakers scheduled during class sessions. In addition, see the "Course Documents" folder on Blackboard, in particular the contents of the folder "Catastrophe risk, Reinsurance, Markets, Climate Change". The first step is development of a common set of resources (links and articles) ... some of this has been done. Next, you need to choose an assignment (one of each o f the three above). Third, developing an outline - this is an individual effort, and will be graded. Last, completion of the report, within the deadline.  

Outcome, or Research Results:   each student will write a research paper on the exposures to loss, the available risk management strategies, and the prospects for changes to the risk management plan.
See "Guidelines" for the acceptable format, length, and so on.   

The process:

1. Select a financial institution which is currently involved, such as Goldman Sachs, CitiGroup,
2. Select a reinsurer currently involved, such as Travelers' HarborPointRe, MunichRe, SwissRe, HannoverRe
3. Select an insurance company (publicly traded) such as Allstate, Chubb, Hartford, HCC Holdings, AIG   
4. Write an outline (three levels) and complete a 5 page research paper. Study Groups are encouraged, but the research paper is an individual effort. 
   
   Then for these, be sure to answer each of the questions below:

• What are the concerns of each, in the outcome - may want to mention any mergers, acquisitions, or initiatives in past year. What are their major challenges - legal, regulatory, significant events, other (e.g.., lawsuits) (example of corporate social responsibility report)
• Where are they domiciled? and how does this influence decisions - and what countries, states do they write in; and off-shore activity; global markets and issues, any new market or new energy-sustainability initiatives, sub-prime mortgage
• What is their risk appetite? What are their markets - what lines of business, what markets, specialty or traditional, reinsurance or primary (or both); withdrawn from any markets, any initiatives / innovative products / new markets - current events and changes in rating (example)
• How do they use technology? What are the major in-sourcing or outsourcing deals in past 5 years, modeling (e.g., catastrophe risk); compliance/regulatory tech usage (operational risk mgmt.); IT governance issues; scope and purpose (example); communications; customer service/information decimation (example)
• What about loss mitigation? Their investment or activities, in the public realm? Community or state-based? How are they involved in the geo-political arena, such as influencing legislation and public policy, residual market mechanisms?
• How do they use reinsurance, derivatives, catastrophe bonds, other alternative risk financing mechanisms?
• Their (and your) observations and forecast (how do they manage risk? over the past three years, what are the trends?)

Financial Services Facts (courtesy III)

Preliminary outline due March ___

Final deadline: April 22nd