Archive for May, 2015

The reinsurance market continues to face secular and cyclical decline, according to analysts at global investment firm Bernstein and, despite all the evidence of growing demand, there is an expectation that it will be exceeded by the growth of capital in the sector.

Rating agency Fitch has provided some more detail and background information on U.S. primary insurer AIG’s latest catastrophe bond, the $200m Compass Re II Ltd. (Series 2015-1) deal which launched earlier this week.

Nephila Capital, the largest fund manager in the insurance-linked securities (ILS) and reinsurance-linked investment space, has been selected as a sub-advisor for a second multi-asset class mutual fund operated by Blackstone Alternative Asset Management.

There’s a lot of talk about innovation, new business models, alternative capital, start-ups and external investors in the insurance and reinsurance market right now, but there is another way to navigate the challenging market environment.

Analysts from Barclays Capital have turned their outlook on the European insurance and reinsurance sector to negative, from neutral, citing the significant and growing headwinds that companies in the market face.

While property catastrophe reinsurance pricing is generally accepted to be the line of business that has suffered the steepest decline in rates, the current prices are still attractive and in fact better than insurance on a risk adjusted basis.

There’s a new strategic asset class in town, the Crisis Risk Offset (CRO), a select group of assets that could provide returns and liquidity during an economic growth crisis, and one of the assets considered able to offset a crisis for investors is ILS and reinsurance.

Reports suggest that it is unlikely that insurance and reinsurance firm AXIS Capital will revise its merger offer and sweeten the deal further to combine with PartnerRe, despite EXOR’s improved all-cash bid.

Australian primary insurance group Suncorp expects severe weather and catastrophe events of the last two months to cause an industry loss of around AUD$1.55 billion, resulting in Australian insurers calling on their catastrophe reinsurance programmes.

The downward price pressure seen on many bonds in the secondary market for trading in catastrophe bonds and insurance-linked securities (ILS) during March has persisted into April, as lower yielding cat bonds particularly struggled.