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Decade In Review

Ending a calendar year provides a great opportunity to officially close the book on a specific period of time and review what has happened. We’ve grown accustomed to seeing annual reviews of the things that have shaped a year as it closes, but we get the opportunity to reflect on an entire decade much less frequently. There are all sorts of reviews appearing that highlight the last decade, and it’s amazing how fast one can forget key events that have happened. Indeed, when I present on weather trends in the insurance industry, I often suggest that our weather memory is generational, and we really only remember the last impactful event. In reality, however, our weather memory is likely even shorter than that. Therefore, I want to take this opportunity to review what I think are the biggest events that have shaped the catastrophe analytics industry over the last decade. Clearly, this is relative, as there is an almost endless list of events that could be labeled as local industry-changing. From my point of view, though, there are just a handful of key events that will have lasting effects into the next decade for the insurance/reinsurance catastrophe analytics industry. Before I highlight my top event, let’s look at some of the other contenders.

The decade began very actively with major earthquake events around the world. Just under two weeks into the new decade, a 7.0-magnitude earthquake struck Haiti on January 12, 2010 and quickly became a humanitarian disaster with a death toll reaching over 230,000. Just 46 days later, an 8.8-magnitude earthquake hit Chile on February 27. A few months later and halfway around the world, a 7.1-magnitude earthquake struck near Darfield in the Canterbury region of New Zealand on September 4 and was followed by a series of large aftershocks that changed nearby Christchurch forever. A few months later on March 11, 2011, nearly 16,000 people lost their lives from the Tohoku 9.1 earthquake and resultant deadly tsunami, which still gives me chills when I remember watching the live videos unfold that day on TV. There have been many other large earthquakes as well, such as Napa, CA (2014), Nepal (2015), and Italy (2016), all of which had a large influence on the insurance industry. These earthquakes also impacted catastrophe model updates, not only regionally, but also across the globe, as they provided excellent learning opportunities and new information related to engineering, aftershocks, liquefaction and multi-fault raptures. Catastrophe modeling companies have been able to use lessons from these events to update key components in U.S. earthquake models, despite not having a lot of resources dedicated to researching earthquakes in the U.S.

Severe Weather
The decade also kicked off with another string of events that seemed to come out of nowhere and can change the catastrophe analytics industry in the blink of an eye. The U.S. severe weather season was active in early 2011 with two key events: 1) the EF4 tornado that struck Tuscaloosa and Birmingham, Alabama on April 27, and 2) the EF5 tornado that struck Joplin, Missouri on May 22. That 2011 severe weather season still stands out in terms of the insured loss and the number of severe weather observations. These events were likely the final straw for the various catastrophe modeling companies, as they soon upgraded their older severe thunderstorm models with pretty drastic changes. In fact, prior to 2011, many insurance companies largely disregarded the catastrophe modeling output. However, with the newer models we currently have, the output is actually being utilized by insurance companies in many different facets of their business. The 2011 tornadoes also illustrated the importance of understanding the increased risks associated with the growth that is occurring in many urban areas around the world. These events are useful in deterministic event analysis to see what might happen if a Joplin-type event hit an area of high exposure concentration.

Non-Hurricane Landfalls
In the early part of the decade, another large event occurred that had far-reaching effects. After threatening much of the U.S. East Coast, Superstorm Sandy eventually made landfall along the New Jersey coastline on October 29, 2012. With over 60 million people affected, this storm taught many lessons to inhabitants in an area of the coastline that has had relatively few large named storms make landfall in the past. You may remember that this storm prompted many discussions around whether it was, in fact, a hurricane. How that uncertainty influenced hurricane deductibles was very interesting. It highlighted issues with coastal storm surge and rainfall in highly developed areas, prolonged business interruption, and how contents and components of critical infrastructure, such as servers and electrical systems, are modeled.

In reviewing the last decade, the devastating wildfires that occurred, starting with the Fort McMurry, Alberta, Canada wildfire on May 3, 2016, warrant mention. Soon thereafter, we saw a rare southeast wildfire hit Gatlinburg, TN in November of 2016. These events were the precursor to several major wildfires that impacted California and brought much-needed change to outdated catastrophe models to address this costly new peril. We also saw new burdens placed on policyholders as a result of these events, such as non-renewal notices and state mandates. As rolling power outages became more common, they brought new attention to business interruption insurance. The wildfire risk continues to grow around the world, and the lessons we’ve learned thus far are changing how this risk will be viewed in the future, with much more focus on defensible space and overall accumulation of risk in any one given wildfire zone or Wildland Urban Interface (WUI).

New Risks
An interesting aspect of looking at catastrophic losses over a decade is that new trends can be observed. When thinking back to 2010, many in the insurance industry thought the word “cyber” was about computer networks or virtual reality. In just a decade, however, a new industry has been born, which will likely continue to grow in the future. We are just at the forefront of new product offerings and understanding the risk associated with cyber loss, with new cyber models now becoming another tool catastrophe analytics can incorporate into their daily management of risk.

Lastly, a review of the decade would not be complete without thinking about the countless major flooding events that have impacted the world over the last decade, many of which were labeled 1,000 year flood/rainfall events. This is likely the hardest list to narrow down, but I think two events are the most prominent. The 2011 Southeast Asian floods stand out as major industry events because they were a classic known/unknown risk with many new factories being built on known flood plains, but no catastrophic hazard models to understand such risk. The losses were compounded with contingent business interruption losses after the Japan Earthquake forced suppliers to relocate from Japan to Southeast Asia. Clearly, these circumstances provided far-reaching opportunities to better understand worldwide flood risk. Hurricane Harvey’s (2017) wind-related losses pale in comparison to its flood-related losses. As flood is typically not a covered peril in private homeowner’s policies, the large majority of Harvey’s impacts were uninsured, illustrating that there is a large protection gap even in the U.S. Commercial and automobile flood losses still made Harvey a major event for certain segments of the market, however. The flooding likely also put stress on the catastrophe analytics industry to invest more time and resources into understanding the peril. However, Hurricane Harvey had an even greater influence, which brings me to the most impactful event to the catastrophe analytics industry over the last decade.

The Top Event
For much of the last decade, the continuation of the U.S. major landfalling hurricane drought and the quick revision to the mean with HIM FM landfalls (Harvey, Irma, Maria in 2017 and Florence and Michael in 2018) was unprecedented and had far-reaching effects across the global insurance industry. HIM FM provided valuable new data sets for the catastrophe risk models, yet also had individual influences on the catastrophe analytics industry. In the 170 years of landfall records, never had there been an extended period lasting this long without a major hurricane landfall. Twenty-seven major hurricanes occurred in the Atlantic Ocean basin since the last major hurricane, Wilma, struck Florida in 2005. The odds of this are 1 in 2,300, according to Phil Klotzbach at Colorado State University.

However, compared to the earthquakes, this return period is nothing, so why is this the top event for the decade one might ask? There are too many factors to discuss in this short BMS Insight, but, when you think about the startling lack of hurricanes after the 2004 and 2005 hurricane seasons when catastrophe modeling companies and the insurance industry were trying to gain a better understanding of the frequency and severity of these storms, the impacts were far-reaching. As a result of the major landfall activity after the 2004 and 2005 hurricane season, some in the insurance industry took drastic steps, and catastrophe modeling companies implemented rate changes that would cost the industry billions of dollars in increased reinsurance spending over the following years that experienced no landfalls. In the first part of the decade, however, without any major U.S. landfalling hurricanes and global capital realizing that catastrophe risk is not correlated with the global economic cycle, capital flooded into the catastrophe markets and resulted in falling reinsurance prices. At the same time, the population of coastal areas exposed to hurricanes continued to increase, and complacency set in among the insurance industry and the general public, limiting disaster resiliency.

So, 10 years ago, the insurance industry was coming out of a decade of an unprecedented series of hurricane strikes and reeling from high insurance and reinsurance rates. No one at the time could predict that the industry would be granted an unprecedented, decade-long reprieve by Mother Nature, while simultaneously enjoying the most favorable global reinsurance and catastrophe market in memory. When HIM FM finally broke the long-standing hurricane drought, it taught many new lessons to the insurance industry that will last well into the next decade. This, to me, is why the continuation and end of the hurricane drought was the most important event to the catastrophe modeling industry in the last decade.

The 2020’s
Taking the opportunity to look back at the last decade clearly shows there are cases where history can repeat itself. There are a great number of known unknown events that can impact the insurance industry. There are many current questions that could be addressed in the decade to come, like what will happen with climate change and how will the catastrophe models account for the near term and long terms trends that could start to emerge over the next decade. Maybe there will be rare perils that impact the insurance industry such as geomagnetic storms or maybe a major volcanic eruption near a large population center. Neither of these perils has a standard catastrophe model, but they are often covered insurance risks. One thing is certain there will be surprises over the next decade. The catastrophe analytics industry will continue to quantify the risks using new technologies which will help reduce uncertainty and maybe even create new markets, ultimately closing the protection gap around the world.

BMS builds out US reinsurance analytics team with three hires

BMS Group (“BMS”), the independent specialist (re)insurance broker, today announced three appointments to its US reinsurance analytics team in Philadelphia as the Group continues to enhance its analytical and actuarial services.

  • Nick Dranchak has joined as executive vice president, capital management of BMS Re US. He will be reporting to Kirk Conrad, chief analytics officer, effective immediately. Dranchak will lead the team’s ratings agency advisory services and be heavily involved in strategic business planning for clients. Before joining BMS, Dranchak spent over five years as head of strategic advisory at JLT Re.
  • Michelle McClane has joined as vice president, catastrophe analytics of BMS Re US, reporting to Julie Serakos, executive vice president. McClane brings nearly 22 years of catastrophe modelling experience to the team. Her most recent role was assistant vice president at Guy Carpenter.
  • Paul Blain has also joined as vice president, actuary of BMS Re US, reporting to Kurt Johnson, executive vice president. Prior to BMS Paul held actuarial roles at Guy Carpenter and the Medical Mutual Liability Insurance Society of Maryland.

Pete Chandler, President & CEO of BMS Re US, said: “Seamless analytics process is one of the key ingredients of BMS’s advisory services. Our cross-disciplinary team structure has proven to be successful in helping clients understand their risks and find the ideal solutions. As we continue to invest in our analytics platform, we are very pleased to welcome Nick, Michelle and Paul to the team.”

BMS Capital Advisory appoints Alex Orloff as Director of Capital Markets Analytics

BMS Group (“BMS”), the independent specialist (re)insurance broker, today announces that Alex Orloff has been appointed as Director of Capital Markets Analytics at BMS Capital Advisory, the investment banking division of BMS. Orloff will report to Romulo Braga, CEO of BMS Capital Advisory, effective immediately.

Orloff will lead the development of qualitative investment diligence and quantitative market analytics for private and public issuers and institutional investors.

Orloff was previously founder of Sybella Research, a pioneer in investment research coverage of private issuers in the insurance industry. Prior to Sybella, Orloff has held a variety of executive positions as a senior analyst and portfolio manager in asset management (Lazard, Twelve Capital) and sell-side research firms (DLJ, Bank of America, Credit Suisse) over the course of his twenty year career.

Braga said: “With the financial backing from our institutional investors, BMS will continue to grow and invest in industry-leading resources, like Alex, to benefit our clients. Guided by a group-wide partnership approach, BMS Capital Advisory is a key capability in providing clients with cohesive capital management advice, and as a multi-asset investment specialist with broad experience in diverse capital market functions, Alex will further strengthen and professionalize our offerings.”

Orloff added: “BMS Capital Advisory has developed a credible track record of providing integrated risk and capital solutions, which I consider a key competitive advantage over industry peers. I am very much looking forward to joining this dynamic and independent company with its entrepreneurial culture, and believe we have significant opportunities to bring more investors to the space and reduce our clients’ cost of capital.”

2019 Atlantic Hurricane Summary

Was the 2019 Hurricane Season Active or Not?
The six-month 2019 North American hurricane season is officially in the books and it was an active one in terms of named storm counts, with the majority of activity coming in the typical mid-August and mid-October periods. The season ended with 18 named storms, six of which became hurricanes, and three of those achieving major hurricane status (Category 3+ on the Saffir-Simpson scale). Having 18 named storms in a season is well above the 12.1 average (1981 – 2010), but the number of hurricanes and major hurricanes are right around what would be expected in an average year. In terms of ACE (Accumulated Cyclone Energy), the season ended up at 123% of the average, with two storms, Dorian and Lorenzo, contributing an impressive 61% to the tally.

Preliminary Atlantic Tropical System Track Map Source: NHC:
Key parameters that track the overall activity during a hurricane season. Source: NHC and Colorado State University

What is, perhaps, even more interesting is that, of the 18 named storms, eight of them lasted two days or less and some didn’t even last 24 hours. Two storms (Olga and Imelda) ended up being named storms for only six hours. The number of named storm days totaled 68.5, which is 115% of the expected 59.5 average (1981 – 2010). This year clearly showed the bias to satellite observations, as several of the named storms this year likely would not have been named in the pre-satellite era.

Even these short named storms can be destructive to the insurance industry, such as Imelda, which impacted parts of eastern Texas with 43 inches of rainfall. This highlights that the category is not always indicative of how destructive a hurricane might be. In fact, the named tropical storms of Imelda, Nestor, and Olga accounted for 42% of the total U.S. insurance industry loss this season, which should likely ultimately settle for under $2 billion. However, it should be noted that the named storm average annual loss for the U.S. is over $15 billion annually, so the U.S. insurance industry was lucky this year, especially considering Dorian.

The season will clearly be remembered for major hurricane Dorian, which stalled over the northern Bahamas as a Category 5 hurricane for nearly two days and gave south Florida a good scare when the monster storm refused to leave the area. The insured loss impacts to the Bahamas are expected to surpass $3.5 billion (USD). Despite the strongest winds remaining off the coast of the U.S., impacts were still felt in Florida, Georgia, South Carolina and North Carolina (but not Alabama). This will be the largest insured loss event for the U.S. this season at over $500 million.

We also can’t forget about Dorian’s impact to eastern Canada, which is expected to hit around $2 billion (CAD) of loss and had a wide-ranging impact. This is a good reminder that strong named storms can easily impact New England during a hurricane season. With saturated ground and trees being in full leaf, many large trees were uprooted across eastern Canada, leading to long-term power outages, a major source of loss after strong wind events. Around 80% of the homes and businesses lost power in Nova Scotia at one point which is a reminder that the insurance industry can easily suffer losses from long term business interruption payments.

How Lucky
I’m not sure if the worldwide insurance industry truly understands the bullet that was dodged this hurricane season, as we saw the most intense hurricane to ever impact the Bahamas, which also tied the record with the 1935 Labor Day hurricane for the strongest landfall anywhere in the Atlantic. Clearly this would have been an industry-changing capital event if Dorian had stalled over Palm Beach or Miami-Dade counties with 185 mph winds and 40+ inches of rain. The losses could have easily reached $75 billion of insured loss and maybe more. The winds alone would have caused considerable damage to almost every single insured property in southeast Florida. The storm surge and flooding rains would have likely had a major impact on the National Flood Insurance Program and many of the new private markets now writing flood business in Florida. Even with 11 consecutive years (2006 – 2016) of no major hurricane catastrophes in Florida, there have been other loss issues across the state that have already strained parts of the market. Such a catastrophic event at this time would have been a big stress test for the Florida Hurricane Catastrophe Fund, considering such a Dorian-type event would be near the 100-year to 250-year event that many companies plan for on a yearly basis.

The other noteworthy (positive) impacts on the insurance industry might be the huge void of hurricane activity in the Caribbean Sea and Gulf of Mexico. In fact, only hurricanes Dorian and Barry reached hurricane-strength in those areas, which again is welcome news for the insurance industry. It always amazes me when a named storm can impact the tiny insurance hub of Bermuda, which happened this year with Hurricane Humberto.

A look ahead to 2020:
I admit that it’s way too early to make predictions for the 2020 Atlantic hurricane season, but some of the climate forcers to think about for 2020 are listed below.

  • El Niño Southern Oscillation (ENSO) is currently in a neutral state and is forecasted to stay there for the beginning of the 2020 Atlantic Hurricane Season. If this is the case, neither La Niña or El Niño will have a large influence on wind shear or storm tracks.
IRI ENSO forecast model Based Probability showing Neutral ENSO Conditions next hurricane season July August September (JAS)
  • After spiking this summer, the Atlantic Multidecadal Oscillation (AMO) index dipped back to near average in November according to the Klotzbach and Gray AMO index, as far north Atlantic sea surface temperatures are currently near their long-term average values. This could have explained the higher activity this season and could lead to lower counts next season if sea surface temperatures continue to drop.
After spiking this summer, the Atlantic Multi-decadal Oscillation (AMO) index dipped back to near average in November.

BMS reorganises US reinsurance management team as expansion continues

BMS Group (“BMS”), the independent specialist (re)insurance broker, today announced a series of management changes within its US reinsurance team as the intermediary continues its significant US expansion. This follows the completion in October of a large-scale investment into BMS by British Columbia Investment Management Corporation (“BCI”) and Preservation Capital Partners (“PCP”).

The following appointments have been made:

  • Pete Chandler has been appointed as CEO of BMS Re US, effective on December 9 and reporting to BMS Group CEO Nick Cook. He will oversee the overall operations of BMS Re US and focus on its strategic development. Chandler joined the team as President in May this year and is based in San Francisco.
  • Steve Korducki, currently CEO of BMS Re US, will transition to the role of CFO, based in Minneapolis. Korducki’s experience has been invaluable to BMS over the past year and, as a former CEO of P&C insurance companies, he will have a crucial role in managing the enlarged BMS reinsurance platform.
  • Andrew Bustillo, currently executive managing director of origination for BMS Re US, is also taking on the role of vice chairman, having previously held the CEO position. He will continue to drive production efforts and will be based in New York.

Nick Cook, CEO of BMS Group, said: “BMS Re US is primed for growth. With the backing of BCI and PCP, we are ready to fulfil our role as the independent reinsurance alternative to the big three. We have already made a number of significant appointments in the US and London, with many more hires of the industry’s top-tier talent planned.”

Chandler added: “BMS Re US has the best talent in the business, financial backing that is the envy of the industry and a client-centric, independent ethos that has consistently demonstrated it adds value to our clients, as they define it. With Steve and the executive team, I am very excited to take on the reins as we build out this business and create the best and largest independent reinsurance broker in the US.”

Australian Catastrophic Events In The Spotlight

Australia has been the recent focus of global media attention due to the severe bush fires and hail storms that occurred over the Australian spring months. However, questions remain if the impact to the Australian insurance industry will continue into the summer months, and if there should be heightened concern regarding the active Australian cyclone season that is already a month old.

The 2018 and 2019 storm seasons have been costly for Australia’s insurance industry, and the recent bush fires and hail storms will only add to the total loss this year. Bush fires, which continue to burn across New South Wales, have garnered worldwide attention since an estimated 104 fires are yet to be contained. Interestingly, bush fires, historically, have accounted for only about 12% (or AUD $11.1B) of the typical losses in Australia, but that does not mean fire losses couldn’t easily climb higher as they have in the U.S. in recent years. As a counterpoint, floods are also a well-known problem in parts of Australia and actually account for more loss than fire at 15% (AUD $13.6B). Hail events account for about 27% (AUD $25B) with, notably, the 1999 Sydney hailstorm at AUD $5.6B being one of most expensive events to ever occur in Australia. The most costly peril historically, however, is cyclone, which accounts for 29% (AUD $26.1B) and is why the cyclone season is so closely watched. However, even with the annual occurrence of large catastrophic events, a new paper by McAneney et. al (2019) suggests there is no trend in normalized losses from weather-related perils, which account for 94% of losses in Australia, when such losses are aggregated.

Although the bush fires and recent hail storms have been devastating, it is important to remember that, with every passing year, a greater percentage of the population is moving to large urban centers, such as Sydney. These urban centers are expanding into the bush fire risk zones, so perils are impacting a larger portion of the population than what was previously the case. The population is also expanding along the coastlines, which will make the threat from cyclones even more costly over time. Although the rising cost of natural disasters is grabbing the media attention, the cost of these natural disasters is being driven by where and how a society chooses to live. When more people live in vulnerable locations with more to lose, it follows that costs will rise. This is why it is important to look not only at loss trends, but also to consider the various trends in weather perils that cause the loss. After all, there’s no such thing as a natural disaster – only natural occurrences which become disasters because of human interaction.

 Normalised losses from weather-related events only for Australia. The slope of the regression line is not significantly different from zero and the dark grey area depicts the 95% confidence interval. Source: McAneney et. al (2019)

Eyes on the Cyclone Season
With most of the ocean basins that produce named tropical cyclones now cooling in the winter months in the Northern Hemisphere, the Southern Hemisphere oceans are heating up. Since Australian cyclones contribute to the highest proportion of the historical loss, there is a watchful eye on these seasonal forecasts. Currently, the largest Australian climate forcers are driven by two significant ocean sea-surface temperatures (SST) signatures, namely the El Niño Southern Oscillation (ENSO) and the Indian Ocean Dipole (IOD). Most have heard and know about what impacts ENSO can have across the continent and on the Australian cyclone season. SST anomalies across the equatorial Pacific Ocean, which is where ENSO is measured, had been typical of a neutral ENSO phase since April 2019. The negative phase of ENSO (La Niña), which tends to bring flooding rains and higher cyclone landfall probability to Queensland, is not forecasted to develop. The international climate models continue to indicate that the neutral conditions will likely persist until at least February of 2020. Generally speaking, a neutral ENSO phase has little influence on Australian weather. However, Australia as a whole just had its driest spring ever recorded, and the mean maximum temperature was the second warmest on record – typical of a positive phase of ENSO or El Niño. With ENSO neutral conditions in play, however, something else is driving these extremely dry conditions and above-average temperatures across the continent, which have likely contributed to the large bush fire risk across New South Wales and Queensland. If ENSO is neutral, the lesser-known IOD, which is one of the strongest in the last 60 years, seems to be the main climate forcer impacting Australian weather patterns currently. This strong positive phase creates a drying influence over parts of the country.

What is the IOD
IOD is characterized by cooler waters to the northwest of Australia, south of Indonesia, and warmer waters west towards Africa. The positive IOD contributed to low rainfall over southern and central Australia during winter months and with just as small short reprieve during last Australian summer (Dec – April) since May 2019 the IOD has been positive contributing to this overall dry pattern. In combination with reduced rainfall, positive IOD events also lead to reduced humidity across Australia. Recent months have seen notably low humidity, which enhances potential evaporation. A positive IOD is likely to remain the dominant climate driver for Australia, but, seasonally, the IOD events typically transform during the early summer as a large scale monsoon trough moves into the Southern Hemisphere which is why the IOD index below is coming off one of its strongest level in 60 years.

Diagram of a the positive phase of the IOD. Source BOM
Chart of the IOD index showing how strong it has been over the last year. It also shows the IOD is starting to weaken over the last couple months which is typical of the Nov – Jan time frame. Source: BOM

The IOD has less impact on the South Pacific cyclone season. This tends to be influenced by ENSO, which was slightly positive in a weak El Niño state about a year ago helping to explain the lack of activity for the South Pacific cyclone season, which was below average with no cyclones making landfall along the more populated east coast of Australia last year. The IOD has more influence on the cyclones that form in the northern and western regions of Australia. Since the IOD is currently positive, the overall effect should result in below-average activity for these coastal sections of Australia, which are less populated, but also contain large mining areas which could easily be impacted from cyclones that make landfall. A positive IOD should also point to higher-than-normal activity over the southwest Indian Ocean, which is where early season cyclone activity is already forming. As the season progresses, keep an eye on the SST. Over the last three months there has been warming in the waters northwest of Australia – one of the key ingredients to named storm formation. Although the current forecast is for below-normal activity, signs point to low confidence in this forecast due to the increase in water temperatures over the last few months. Overall, cyclone formation will come in waves and will rarely be spread evenly throughout the season. Quiet periods can easily be followed by bursts of activity driven by climate forcers such as the Madden Julian Oscillation, which circulates the tropics as a 30 to 60 day oscillation. Keep an eye on this climate forcer as well.

This is the Eastern Hemispheric SST anomaly with the top image being December 2019, middle image November 2019 and bottom image is September 2019. Notice the red circled area has gotten colder since September which would have negative impact on the cyclone season in this areas. The blue circle in shows a warming trend since September which could influence more named storm formation in this area.

Bottom-line for Australian Summer
Australia will experience more heatwaves and bush fires during summer, but fewer cyclones could make landfall. At least one tropical cyclone has crossed the Australian coast each year since reliable records began in 1970 with four occurring in a typical year. However, with fewer-than-average numbers expected in the various cyclone regions, this should ultimately lower the landfall probability of a named storm crossing the Australian coastline. However, the now warmer-than-normal SST northwest of Australia provides lower confidence in the overall number of cyclones that could form, possibly leading to more cyclones and more landfalls in this region of Australia. With a neutral ENSO and colder-than-normal SST off the northeast coast, below-average cyclone activity is expected.
There should also be less overall severe weather events across Australia, but this does not mean that severe weather with damaging perils like hail won’t occur. Australian summer can be hectic, and although the climate forcers suggest less risk overall due to neutral ENSO and positive IOD, wild weather will happen. One should not get complacent as severe weather season can last well into April, and it only takes one thunderstorm to cause flash flooding or hail damage and insured loss. Although many of the bush fires are started by humans, some still occur naturally from lightning strikes, so this risk will last well into the summer months.

BMS launches Private Equity, M&A and Tax Insurance division with senior appointment

BMS Group (“BMS”), the independent specialist (re)insurance broker, today announced the launch of a Private Equity, Mergers & Acquisitions (M&A) and Tax Insurance division, which will begin operating in the new year. Tan Pawar has been appointed Managing Director of the new team and will report to Ian Gormley, Managing Director of BMS Global Risks. Pawar will join BMS upon completion of contractual obligations.

Pawar’s appointment is the latest in a series of senior hires as BMS continues its expansion drive following the completion of substantial investment by British Columbia Investment Management Corporation (“BCI”) and Preservation Capital Partners (“PCP”).

Pawar most recently served as Senior Vice President at Paragon International Insurance Brokers Ltd, where he co-formed the M&A Insurance division in 2014. Prior to that, he was Divisional Director, International M&A & Transaction Services at Willis since 2011. A qualified corporate and M&A solicitor, Pawar has extensive experience in the space and will be tasked with developing BMS’s presence in the M&A insurance sector.

Gormley said: “BMS is growing at pace: we have the capital backing, global platform and broking talent to be the world’s leading independent insurance and reinsurance broker. We have identified a significant gap in the market to provide tailored products for corporate M&A transactions and will be expanding significantly in this space.”

Pawar added: “I am delighted to be joining BMS, a leading independent global broker backed by long term capital, at this exciting time in the Company’s development. There is significant need in the M&A insurance space for more bespoke and innovative solutions and BMS has the scale and firepower to deliver this to the M&A and Private Equity community.”