Monday, December 31, 2012

Politics: A New Catastrophe Reinsurance Risk

In a new report out today on the state of the catastrophe reinsurance industry, Willis Re has this interesting passage (here in PDF):
Superstorm Sandy has yet again demonstrated the danger of overreliance on catastrophe models, due to the complexity of the original loss as well as the emergence of a new and as yet unmodeled uncertainty: the politicization of policy form interpretation. Buyers who have relied on covers with indexed, non-indemnity triggers may yet find their reinsurance protections do not respond to Superstorm Sandy loss recoveries in the way they had planned.
What is "the politicization of policy form interpretation"?

This is of course the issue of the "hurricane deductible" that I have discussed recently on this blog. The way for reinsurers to address the politicization of policy form interpretation is to develop covers that rely on indexed, non-indemnity triggers which are robust to political meddling. Such risks are not ever going to be usefully modeled by cat modelers (who have a hard enough time as it is).

In plain English this means that the industry should rely on triggers that are unambiguous, verifiable and, ideally, independent from governmental decision making.

Updated: Normalized Hurricane Losses 1900-2012

The graph above shows an updated estimate of the 1900 to 2012 normalized hurricane losses for the United States. The normalization methodology is described in Pielke et al. 2008 (here in PDF) and the data presented in the graph comes from the ICAT Damage Estimator, which extends the analysis of Pielke at al. through 2011.

Today Willis Re released a report (here in PDF) on the state of the reinsurance industry, and presents an estimated $20-25 billion in insured losses for Sandy. As is conventionally done, to arrive at total losses for 2012 I have doubled the $25B figure to arrive at an estimated $50 billion total loss for Sandy. Please note that the final loss estimate, apples-to-apples with the normalized loss database (kept by NOAA/NHC) may wind up being higher or lower. In addition, I have added in 3 placeholders of $5 billion in losses for the 3 other storms (besides Sandy) which made landfall as post-tropical cyclones of hurricane strength in 1904, 1924 and 1925 -- the losses from these four storms are depicted in grey in the graph above). In 2013 we will develop a rigorous basis for estimating these losses, which I'd guess have a good chance of winding up larger than the placeholders I have entered for now.

In case you are curious there is no trend in the normalized data, which makes sense as there is also no trend in hurricane frequency or intensity at landfall in the United States over the same period, and the lack of trend is insensitive to the removal of the 4 post-tropical cyclones.

What does the reinsurance market say about all this? Willis Re explains:
"most reinsurers are still within their annual catastrophe budgets for 2012 and not facing any capital impact... In the absence of Superstorm Sandy, reinsurers would have found it difficult to resist buyer pressure for further concessions. As such, Sandy’s impact has helped to stabilize market pricing on an overall basis and reinsurers have largely delivered to their clients in terms of capacity and continuity."
In other words, thank goodness for Sandy. 

Last days of training of 2012

Saturday
LC 2x20kg: 5,5
LC 2x28kg: 3,20,5,5
LC 2x20kg: 10

Goblet squat 15kg: 3x 10reps

Bench press 80kg: 2 reps

Sunday
Walk/run: 8,5 kms (60-80% of max HR)

It was dark, and I tried a new trail, and got lost. Hence, my planned short run got longer.
The weather is nothing like this now, the snow is gone
Monday
LC 2x20kg: 3x 5reps
LC 2x28kg: 3, 24,5,5

Bench press 80kg: 3x 3reps
Pull-ups with green band: 4x 6reps, 4 reps (easy, until 5th set when I died)

Stretching

I calculated my lc reps wrong. I thought I finally got 25reps, but the cruel video showed only 24reps... But I have to have some new achievements waiting for 2013 too. As you see in the video there is some distraction going on behind me when I lift. I guess that is good as mental preparation for competition. Except when trying to max out, it is mostly nice to train with people around :-). A few times, people have laid down next to me and started stretching or doing power-yoga or such. They are either brave and/or have good insurance deals.
Twice in the video I do extra swings, I think that is when I lose focus and clean-technique (I pull when off-balance). And, yes I will hold some lockouts slightly longer next year.



Why do you collect what you collect?.

The question is plain and simple...WHY DO YOU COLLECT WHAT YOU COLLECT?..but yet the answer may not be as simple. For me, I started collecting back in late summer of 1993. Just took a random grocery shopping trip (back when they used to sell cards in grocery stores) with my father and for some reason we bought two packs of hockey cards. Then went back the next day and grabbed two more. Then four more..this time two baseball as well. Soon by the end of the week we had a big stack going and from there on it increased. By 1995, was really into collecting buying any product and sport could get our hands on.

One of the first big pulls I remember is this:

Marshall Faulk SkyBox Premium Paydirt 1995 95 #PD9 Colts 

I loved Skybox and their shiny insert cards that stood out. At that point, it was the best pull in my collection. I tried to chase down all of the Paydirt inserts.

We continued to buy cards and mainly focused our efforts onto the three sports we watched. Basketball, baseball and football. On a ride home from the gas station, our new found place to buy cards, my dad who was busting behind the wheel, don't try that either, almost drove off the road when this was discovered in a pack of our 97-98 Topps Chrome basketball

VINCE CARTER 97/98 TOPPS CHROME ROOKIE RC REFARCTOR #199 VINSANITY 
A rookie card refractor of Vince Carter. The hottest player on the market with the hottest card that had a BV of $300+ back then. I remember screaming with excitement!! How could I not! We no longer have the card as my dad sold it not much longer after despite my biggest efforts to keep it. But was and still is one my most exciting pulls.

Also around this time we were dead set on collecting Ken Griffey Jr. The man was a beast at the plate, was a great role model and was just a hobby icon. I started searching for every Griffey card I could get my hands on. I remember staying up late to check the scores and to see if he had hit a home run and if he was the league leader...used to hate when McGwire and Sosa took the lead. Especially knowing what we all know now about the steroid allegations it bothers me more.

1999 Fleer Ultra Diamond Producers Ken Griffey Jr. Mariners MINT!!!  KEn GRIFFEY Jr. - 1997 Studio Postcard Portraits #1 Oversized Card NMT/MINT 1997 Leaf #193 Ken Griffey Jr. LG

And of course no Griffey Jr collection was a Griffey Jr collection without one of these:

1989 Upper Deck Ken Griffey Jr Rookie

It took my summer savings but I found it worth it! I still have it to this day among the other 300+ Griffey cards in my collection. I was actually featured in Beckett Baseball for my collection of Griffey cards and other items such as Cheese cans, Oreo wrappers, Empty cracker boxes, Wheaties boxes, card plaques, magazines and so on.

A few years later I took a year break from the hobby after moving out of my parents house. My dad and I split our collection the best we could and I took my part. I still kept what I owned in storage but my dad sold off his part and left the hobby for good. Which was sad because there was a lot of great cards including a Dan Marino autograph but I didn't have enough funds to pry them away from him. I still to this day don't understand why I dropped out of the hobby at that time..but I did and I missed the huge boom of the jersey and auto card takeover in that time.

So it was 2002 when I dug back into the hobby. Picked up a few hobby boxes from the same gas station, (which no longer sells cards because customers were stealing them that was my LCS) and had a few of what I considered nice pulls:

2002 Fleer Genuine Names of the Game DEREK JETER Jersey   2002 (BB) Fleer Genuine Names of the Game Memorabilia #14 Rafael Palmeiro Jsy  2002 (BB) Fleer Genuine Names of the Game Memorabilia #1 Roberto Alomar Jsy

Being a Yankees fan I was pretty stoked about the Jeter especially with a pinstripe. Was still collecting Griffey who by the time had made his way to Cincy so this was the first card of his I acquired:

2000 Upper Deck Ovation #43 Ken Griffey Jr. Reds  
From there I was really back into the hobby buying any baseball and football cards I could. I dropped basketball after Jordan had left. However, when the news broke on steroids, Griffey's injuries kept accumulating driving down his value (even though value for me is not what I collect for) and when the rookie cards for baseball were getting more confusing around 2006 and seeing how the hobby had evolved into a rookie card hobby I decided to drop baseball and focus my efforts onto football which is my favorite sport to play (which I did as TE, OT, DT, DE) and watch and always had been.

Football cards seem to be the most popular, the most valuable out of all of the sports in my opinion and that is why I collect what I collect right now. Baseball would be second then followed by basketball, hockey and then a battle between racing, UFC, and so on. And since then, that's been my main sport. I do sprinkle in a few other sports here and there when there is a popular rookie (example Strasburg, Harper, Lebron, Lin, Taylor Hall) I must have but other than that, including Griffey, I don't buy them most of the time. But then I sometimes have that random itch where I just want to try a different sport and will.

Now that you heard my short version of why I collect what I collect...I pass the question onto you..the readers...WHY DO YOU COLLECT WHAT YOU COLLECT? Feel free to comment below why or any thoughts on my story.

Winners of Final Week NFL Contest!

Congrats goes out to Super Tom and John Webb. Please email us at sportcardcollectors@hotmail.com with your team choice and we will try to get that out to you soon!

January Monthly Standings

Here are the Standings for Januarys 2013 Contest:

1st place
2nd place
3rd place  

OakRaderTrader                                                 2 points
@Ed_Bearsfan54                                               25 points
SuperTom                                                           32 points
mrblu1976@aol.com                                         16 points
Miami Vice                                                         36 points
Jonathan Hoffman                                            35 points
Jon Liss                                                             2 points
JJ Hernandez                                                    13 points
@markloftus                                                     37 points
Rajee                                                                 2 points
Scott N                                                             25 points
Jammin JD                                                       24 points
John Webb                                                        34 points
Jeff Hoyle                                                         25 point 
Tracy LeVeaux                                                  5 point
Brandon Beck                                                   1 point
Jamie B                                                             13 point
Thomas Young                                                  30 point
Harold Tourjee                                                 16 point
Chunter                                                           5 point
Sam Gordo                                                      8 point
@KentRitchie1                                                22 point
Jason Mears                                                     1 point
Arron Stout                                                      6 point 
Anthony Edwards                                            17 points
@strowyrm                                                     14 points
@markregula                                                  1 point 
Shane Salmonson                                            1 point
@badbrad1987                                               1 point
InfantryRaider (Donald Bohrisch)                   3 point 
Aimee Hoyle                                                    34 points
Wanda McCurry                                             19 points
1985bearsfan                                                  17 points 
Jeremy Ledbetter                                            8 points
Derek Beckwith                                              1 point
Travis Craig                                                   4 points  
@raul duke1134                                            1 point
@swhalenphotos                                           0 point 
Deb R.                                                           2 points 
jeff                                                                2 points 

Happy New Year

May each day of the coming year be vibrant and new bringing along many reasons for celebrations. Wishing you and your loved ones a very happy new year.