Archive for April, 2016

Ratings agency A.M. Best has noted that the continued growth of alternative reinsurance capacity in the global risk transfer landscape could slow somewhat in the future, citing the potential of future losses, a focus on catastrophe insurance and the rise of defined contribution (DC) pension funds.

The first-quarter of 2016 will see global insurance and reinsurance firm Munich Re report figures which are “well below our expectations” and below those announced for Q1 2015, according to the outgoing CEO Nikolaus von Bomhard.

According to U.S. insurance broker Joann Koziol, the insurance and reinsurance industry faces two primary problems. One is systemic risk and the other is NIRP (Negative Interest Rate Policy).

The insurance-linked securities (ILS) market, and London as an ILS market hub, can help cyber risk to flourish as a nascent and growing class of insurance and reinsurance business benefiting from capital markets support, according to a report from BNY Mellon.

Bermuda domiciled reinsurance firm and third-party or ILS capital manager RenaissanceRe (RenRe) saw a decline in its catastrophe premiums written during the first-quarter of 2016, but its third-party backed rated sidecar DaVinci Re profited from lower catastrophe experience and it added third-party capital.

Based on a more typical catastrophe loss year reinsurers aggregate RoE for the full-year 2015 would decline to 3.4%, says Willis Re. Suggesting reduced profitability that leaves little room for firms’ to outmanoeuvre the persistent headwinds challenging the reinsurance sector.

The global threat of rising sea levels and warmer sea surface temperatures as a result of climate change is an area in which the entire risk transfer landscape must increase its efforts, and capitalise on the opportunity to improve resilience, according to risk management and reinsurance industry experts.

U.S. insured losses from winter weather, convective storms and floods have reached $7.4 billion in 2016 already, according to Steve Bowen of Impact Forecasting, a total that will likely rise further with this week’s weather-warned storms and as we enter peak season for severe thunderstorm risk.

Specialist insurance-linked securities (ILS) and reinsurance investment manager Leadenhall Capital Partners LLP has increased its ILS assets by approximately 12% in the first-quarter of 2016, reaching $2.7 billion under management.

Losses from the recent earthquakes which struck the Kumamoto area of Kyushu, Japan, are expected to be “manageable” for non-life insurers in the country, due to their robust capitalisation and conservative reinsurance arrangements.