Archive for February, 2016

Insurance, reinsurance and financial services group Alleghany Corporation saw its investment income derived from its relationship with ILS manager Pillar Capital rise in 2015, as the profit contribution it received from the insurance linked asset manager beat the 2014 total.

Despite signs of rate stabilisation in the global reinsurance market at the key January renewals, analysts at Morgan Stanley have warned that continued pricing below loss cost trend will contribute to further margin deterioration, while reserves are likely to diminish further.

Reinsurance firms operating with a hybrid balance-sheet approach to capital sources, management and funding, are the future of the industry, according to speakers at the SIFMA IRLS 2016 conference in New York.

The European Centre for Medium-Range Weather Forecasts (ECMWF) has selected international tech firm CGI to develop a system that would aid insurance, reinsurance and insurance-linked securities (ILS) players forecast future losses from windstorms across Europe.

The increased maturity of the insurance-linked securities (ILS) sector has been reflected in the transition of its investors, from pure capital providers to sophisticated players with a greater willingness to understand their exposures, underlining the importance of pricing transparency in the sector.

Malta now has its first reinsurance special purpose vehicle (RSPV) as Exchange Re, a platform for collateralised reinsurance transactions, has been launched by captive management specialist USA Risk.

While evident that the wealth of alternative reinsurance capital has contributed to the decline in rates in the property catastrophe re/insurance industry, its presence and influence has also fuelled innovation as insurers take a more aggressive stance, according to Marsh.

The insurance-linked securities (ILS) asset class, of funds featuring catastrophe bonds, collateralised reinsurance contracts, quota share and sidecar investments, industry loss warranties (ILW’s) and other private ILS, displays the lowest volatility of any hedge fund strategy.

Reinsurance giant Swiss Re highlights the potential for exposure development in high growth markets driven by fiscal austerity in 2016, signalling an opportunity for reinsurance and insurance-linked securities (ILS) markets after continued softening in property and specialty lines at the key January renewals.

The wealth of alternative capital in the global reinsurance market could be utilised to increase demand and grow the overall reinsurance pie, creating opportunities for insurance-linked securities (ILS) to meaningfully enter new regions and perils, according to industry experts.