Archive for December, 2015

A number of the world’s leading ILS fund managers have said that they saw a wide variation in reinsurance renewal conditions for January 2016, ranging from disciplined in the United States, to somewhat “crazy” in Europe.

The hopes that reinsurance prices would stabilise at the key January 2016 reinsurance renewals have been dashed, according to broker Willis Re, with further price declines seen across the bulk of the market.

The investment case for the insurance-linked securities (ILS) asset class remains strong due to the diversification benefits ILS offers to a portfolio, despite the lower returns available throughout the reinsurance market, according to Mercer.

Consultancy PwC has raised its estimate for the insurance and reinsurance industry loss from flooding  and damage experienced in the UK from windstorms Desmond and Eva up to £1.2 billion ($1.8 billion), while storm Frank hitting the UK today will raise the toll further.

According to sources in both the insurance-linked securities (ILS) and traditional reinsurance markets, some of the European property catastrophe reinsurance programs coming up for renewal at 1st January 2016 are aggressively priced, with indications at levels below expected loss.

Estimates of insurance and reinsurance industry losses from the recent UK flooding caused by storms Desmond and Eva are rising, with KPMG suggesting re/insurers should expect a £1.5 billion ($2.23 billion) hit.

The recent outbreaks of severe weather in the U.S., which has featured severe thunderstorms, tornadoes, heavy snow, ice and flooding, will result in economic losses of over $1 billion and take the economic loss total from severe thunderstorms to above average for 2015.

Conditions in the life reinsurance market may begin to favour more participation from alternative capital and insurance-linked securities (ILS) managers and funds, as the consolidated market heightens concerns about counterparty concentration.

The United Kingdom continues to suffer from severe flooding, with the latest areas hit being Lancashire and Yorkshire, while impacts are still being felt in Cumbria. The insurance and reinsurance industry could end up paying for as much as £1 billion ($1.5 billion) of the costs, according to PwC.

Here are the ten most popular news articles, week ending 27th December 2015, covering catastrophe bonds, ILS, reinsurance capital and related risk transfer topics. To ensure you never miss a thing subscribe to the weekly Artemis email newsletter updates.