Archive for September, 2015

New institutional and third-party capital entities augmenting the global reinsurance market’s capacity at a time of persistent benign loss activity has transformed the sector’s capital structure, but developments at mid-year renewals could signal change is near, according to JLT Re.

Executives from the insurance-linked securities (ILS), reinsurance and institutional investments space, all agreed that in 2020 the alternative capital market and ILS will be bigger, fully converged, cheaper, more liquid and tradable and more innovative than ever.

Guy Carpenter firmly threw its hat into the insurance-linked strategies ring this week, saying that the partnership announced last week between the reinsurance broker and Vario Partners, forming a non-catastrophe risk ILS vehicle, is a key innovation and initiative for the broker.

Challenges in the global insurance and reinsurance industry have caused firms to adapt and search for returns in an intensely competitive environment, but an industry-wide effort to bridge the protection gap signals vast growth opportunities for risk transfer market participants, says Swiss Re.

The California Earthquake Authority’s latest visit to the catastrophe bond market for the issuance of Ursa Re Ltd. (Series 2015-1), has been well-received by investors, with the cat bond set to grow in size by two-thirds to $250m, while the pricing has settled at the top-end of guidance.

Differing grades of reinsurance “culling” among cedants signals a growing divergence between Tier 1 and Tier 2 reinsurers as strategic partnerships and track record trump capacity, according to Standard & Poor’s (S&P).

Heineken, which acquired the UK business of Scottish & Newcastle in 2009, has announced that it has completed a longevity hedging and reinsurance transaction with Friends Life Limited, now part of insurer Aviva Group, transferring £2.4 billion of longevity risk.

The insurance-linked securities (ILS) market can be a future provider of capacity to help to transfer the enormous exposures presented by cyber risks, according to risk modelling firm AIR Worldwide which has announced a new collaboration to build an advanced cyber risk model.

Insurance and reinsurance group Hiscox’s third-party reinsurance capital and insurance-linked securities (ILS) unit Kiskadee Investment Managers, has announced the launch of Cardinal Re Ltd., a new SPI platform, as well as an increase in ILS assets managed.

The sharing of reinsurance underwriting risks with capital markets investors such as pension funds is seen as a “key development area” at the world’s largest reinsurer Munich Re, as it looks to embrace new business models.