Archive for March, 2016

The two highest profile hedge fund reinsurance firms, operated by leading investment managers Daniel Loeb and David Einhorn, have both highlighted the risks and uncertainty that potential changes to U.S. taxation rules pose to their businesses.

The latest catastrophe bond from sponsoring Japanese insurance group Mitsui Sumitomo has grown in size to $200 million, while pricing on the Akibare Re Ltd. (Series 2016-1) issuance has dropped to the low-end of guidance.

The threat of losses from severe thunderstorms and resulting hail, flooding, and wind gusts are on the rise warns Munich Re, meaning insurers, reinsurers, and insurance-linked securities (ILS) funds’ exposure to the peril is increasing.

Ex-Goldman Sachs structured products head Michael Millette has lined up one of the world’s leading asset management groups as an anchor investor in the funds to be launched by his new venture Hudson Structured Capital Management.

Speaking to A.M. Best at the recent SIFMA IRLS 2016 conference, industry executives said the future of the insurance-linked securities (ILS) market is likely to see the structures and capacity of the asset class utilised in a range of perils outside of the property catastrophe space.

The structuring of the recent $300 million Galileo Re Ltd. (Series 2016-1) international multi-peril catastrophe bond, sponsored by XL Insurance (Bermuda) Ltd. helped to facilitate investor demand, according to GC Securities Cory Anger.

Florida located U.S. primary insurer Safepoint’s latest catastrophe bond, the Manatee Re Ltd. (Series 2016-1) deal, is set to achieve $95m of collateralised reinsurance cover for the firm after the pricing on the now two tranches of notes were fixed towards the upper end of initial guidance.

Capital market investors with an interest in the insurance-linked securities (ILS) space continue to invest in the asset class owing to its diversification benefits, low correlation with the wider financial markets, and the return per unit of risk, according to ILS market experts.

Despite being the second fastest growing insurance market in the world, the majority of African countries report dangerously low insurance penetration, a gap that could be closed with the use of traditional insurance and alternative risk transfer solutions.

Insurance-linked securities (ILS) investment funds started 2016 with a below average 0.23% average return for January, as pressure on catastrophe bond prices affected some funds, while price declines across reinsurance markets continue to weigh on performance.