Archive for August, 2016

Despite being a clear contributor to the competitive operating environment, London market insurers and reinsurers continue to increase their use of capital markets capacity to protect their balance sheets, according to A.M. Best.

The Big Island of Hawaii is set to face impacts from two hurricanes in a matter of days, as hurricane Madeline is set to strike the island this evening and hurricane Lester barrels towards making a closest pass to the island this weekend.

An increase in catastrophe activity during the first-half of 2016 across the U.S. resulted in insured losses of $13.5 billion, which is 20% higher than the ten-year historical average, according to Property Claim Services (PCS).

Despite being untested in the face of a major loss event and their relatively short existence, catastrophe bonds have a strong history of paying claims and the payment timeline is actually similar to that of traditional reinsurers, according to Standard & Poor’s (S&P).

Insurance and reinsurance linked investment specialist Twelve Capital has announced the launch of its equity investment strategy, which further expands the asset managers vision of enabling investments across the insurance and reinsurance balance-sheet.

The average return across insurance-linked securities (ILS) and reinsurance linked investment funds was 0.4% in July 2016, as premium allocation rose due to the U.S. hurricane season but still three of the ILS funds tracked reported negative returns due to the continued impact of losses.

Insurance group Zurich has completed two longevity swap transactions with pension funds of the Pirelli group, between them covering £600m of pension longevity liabilities and with 75% of the risk transferred to reinsurance firm Pacific Life Re.

Rating agency A.M. Best estimates that around 10% of the total economic losses from last week’s devastating M6.2 earthquake in Umbria, Italy will be paid for by insurance and reinsurance markets, as low levels of insurance penetration limit the industries exposure.

Regulatory developments and advances across Asia has the potential to drive an increase in reinsurance demand in the region and, with insurance penetration being amongst the lowest anywhere in the world there’s ample opportunity for growth, according to Fitch Ratings.

The Centre for Global Development (CFGD) has highlighted the growth of the catastrophe bond market as an efficient and “simple” means of insuring natural disasters, but stresses that for the most part, coverage hasn’t reached the most vulnerable and poorest parts of the world.