Archive for October, 2014

The world’s largest reinsurance firm Munich Re believes that pricing for catastrophe bonds and insurance-linked securities (ILS) has stabilised at 2013 levels and expects it to remain broadly at current levels for the foreseeable future.

In keeping with a recent theme, Jay Fishman, Chairman and CEO of U.S. primary insurer The Travelers Companies, Inc., said that he expects the property and casualty insurance and reinsurance market will have a meaningfully lower level of cylicality.

Bermuda headquartered reinsurance company Everest Re has continued to demonstrate that its third-party capital backed, fully-collateralized reinsurance sidecar Mt. Logan Re is core to its business, growing the sidecar again in the last quarter to around $480m.

The expected excess return, or the return available between average expected losses and the average yield spread, of outstanding catastrophe bonds has shrunk to its lowest level since ILS consultancy Lane Financial LLC began tracking the number.

Bermuda headquartered reinsurance group Platinum Underwriters Holdings is ready to embrace a higher risk, higher return, hedge fund style investment strategy this year according to the firms CEO, as had been suggested earlier this year.

A research paper looking at mortality rates in the UK, concludes that there could be errors in the current data provided by the Office for National Statistics (ONS) and suggests that this could lead to basis risk within longevity hedges, swaps or reinsurance transactions.

The evolving insurance and reinsurance marketplace, with further softening in property and casualty risks expected, and the changing dynamics currently underway may spell the end of traditional market cycles, according to broker Willis Group.

The bloodletting in the reinsurance market demonstrates that it is industry capacity that drives the cycle, while the market’s clearing price is now set by the least conservative reinsurance player, according to equity analysts at Alliance Bernstein.

Reinsurance company Swiss Re has further rationalised its life focused Admin Re business unit with the announcement of the sale of its U.S. subsidiary Aurora National Life Assurance Company to Reinsurance Group of America (RGA).

Michael D. Price, President and Chief Executive Officer of reinsurance group Platinum Underwriters Holdings, said that as interest rates look increasingly likely to remain low he believes that the reinsurance market will remain “flooded with capacity.”