Archive for May, 2016

The African Risk Capacity (ARC), Africa’s first sovereign catastrophe insurance pool, has ambitions to grow the size of the risk pool to $1.5 billion by 2020, as it increases the number of countries covered and expands products beyond drought, to include flood and cyclone risk.

Pricing has been set for the Laetere Re Ltd. (Series 2016-1) catastrophe bond transaction, which is being sponsored by three United Insurance Holdings subsidiaries seeking a $100m source of fully collateralized reinsurance.

A new $3.75m private catastrophe bond (or cat bond lite) or insurance-linked security (ILS) transaction, LI Re (Series 2016-1), has been issued through German reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd.

The true extent and cost of the damage caused by April’s earthquakes that struck the Kumamoto region of Kyushu, Japan is becoming clearer, with the Japanese government saying it expects the total economic loss to be up to $42 billion.

Investment bank Credit Suisse’s Operational Re Ltd. transaction, which uses a catastrophe bond structure to secure insurance via the capital markets for operational risk exposures, has now been successfully settled at  a size of CHF 220m (around $223m).

Spinnaker Insurance Company, a program and fronting service start-up launched by ex-Arch Re Ingrey family members, is to gain access to Louisiana business thanks to an agreement with Acadian Managers, LLC which will underwrite and market Spinnaker products in the state.

The first catastrophe bond issued for Security First Insurance Company, the First Coast Re Ltd. (Series 2016-1) cat bond deal, is now set to complete at the reduced amount of $75m and the pricing has fallen to the bottom end of the already reduced spread guidance range.

Lloyd’s ‘names’ are perhaps the original incarnation of third-party capital in the insurance and reinsurance market. Largely high net worth individuals, who backed syndicates and often took on unlimited liability, the ‘names’ model is set for change and could begin to look at lot like ILS capital.

Hudson Structured Capital Management, the insurance, reinsurance and transportation linked investment firm set up by ex-Goldman Sachs structured products leader Michael Millette, has closed on and secured its $250m anchor investment from Blackstone, Artemis has learned.

With adequate profits on investment and underwriting sides of the balance sheet increasingly hard to come by for insurers and reinsurers, reserve releases have helped to bolster returns. However, casualty reserves in the Lloyd’s and London market are vulnerable to adverse run-offs in the future, according to PwC.