Archive for December, 2015

Private catastrophe bonds, also known as cat bond lites, provide a useful way for sponsors to test the ILS market and their appetite to sponsor larger deals in future, as well as an entry-point for sponsors seeking lower limits.

The Association of British Insurers (ABI) has said that it expects the insurance and reinsurance industry to pay for around £520 million ($775m or €715m) in claims from European windstorm Desmond and the resulting flooding in the northern UK.

Global reinsurance firm Munich Re has listed a $75.578 million Rule 144a tranche of collateralized reinsurance sidecar notes, issued in the recently completed Eden Re II Ltd. transaction, on the Bermuda Stock Exchange (BSX).

Pricing in the casualty reinsurance space is expected to increasingly come under pressure owing to the presence of alternative capital, but it’s impact is unlikely to be as influential as seen in the property cat space, say analysts at Morgan Stanley.

Here are the ten most popular news articles, week ending 20th 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.

Rates in the global reinsurance sector declined throughout 2015 as the pressures from alternative reinsurance capital, benign losses, and stiff competition persisted. And while declines in rates moderated somewhat in recent months, Fitch Ratings believes a pricing floor is yet to be reached.

A newly launched high-resolution, multi-peril UK flood model from JBA Risk Management, designed to help insurers and reinsurers to work with the governments Flood Re reinsurance facility, could also be applied to help issue a UK flood catastrophe bond.

Global reinsurance company Munich Re is set to secure $360 million of third-party capital market investor support for the renewal of its Eden Re II Ltd. fully-collateralized reinsurance sidecar, Artemis understands.

The port of Tianjin, China storage facility explosions is set to lead the way in 2015 as the largest single catastrophe or man-made disaster insurance industry loss, but the total for the year is set to come in well below average, at an estimated $32 billion, 48% below the long-term average.

A persistent flow of insurance and reinsurance industry merger and acquisition (M&A) activity trended throughout 2015, with “significantly” more deals expected over the coming months. This consolidation has the potential to stabilize rates, but diminish demand in 2016, according to KBW.