Archive for March, 2016

Japanese insurance group Mitsui Sumitomo Insurance Co. Ltd., a subsidiary of MS&AD Insurance Group Holdings, has hailed the completion of the first annual aggregate Japan typhoon-only catastrophe bond, its recently sponsored Akibare Re Ltd. (Series 2016-1) deal.

The latest catastrophe bond to be sponsored by Sompo Japan and Nipponkoa Insurance Company, the Aozora Re Ltd. (Series 2016-1) Japan typhoon cat bond, is set to upsize by 25% to $220 million, while at the same time demand from investors has seen the price guidance reduced.

Reinsurance firms are operating very close to breakeven, on a normalised basis, reflecting the “wider deterioration in market conditions, driven by lower reinsurance prices feeding through to results,” according to Fitch Ratings.

Collateralized reinsurance firm Oxbridge Re reported a decline in net income for the final quarter of 2015, owing to poor performance on the investment side of its portfolio, as financial market volatility continues to challenge the non-traditional investment strategy.

The continued and growing appetite of third-party, capital markets investors to access insurance and reinsurance-linked exposures through the features of the insurance-linked securities (ILS) market suggests a flattening of the reinsurance market cycle, according to speakers at the 2016 SIFMA IRLS event.

Reinsurance reserve releases have been slowing over recent quarters for many in the sector, with the fourth-quarter of 2015 seeing more reinsurers reporting smaller releases, rather than larger, a trend that analysts at Keefe, Bruyette & Woods expect will continue.

Here are the ten most popular news articles, week ending 20th March 2016, 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.

Investments in private insurance-linked securities (ILS) mechanisms is a growing sub-sector of the overall ILS space, and its attractiveness to third-party investors as a viable asset class is supported by the illiquidity premium offered, according to Sandro Kriesch of Twelve Capital.

According to Fitch Ratings there may be a reinsurance regulatory arbitrage available that could benefit U.S. reinsurers, as cedants in Europe look to offload more of their risks, due to higher capital requirements under Solvency II, while reinsurers outside of the S2 framework could have an advantage.

Scientists have highlighted the possibility that the heightened period of hurricane activity that began more than 20 years ago has ended, suggesting that insurance-linked securities (ILS) investors with related exposures could need to adjust their view of the peril, according to Deutsche Bank Securities.