Archive for August, 2016

Compared with more developed regions, the Asian insurance and reinsurance market remains small, resulting in less concentration and focus on the tail risk. However, when penetration grows and the tail risk becomes more important there ILS’ role in Asia will grow, says Lixin Zeng.

Cyber risk is reportedly the fastest growing insured peril across the global property/casualty (P/C) insurance space, with the market forecast to expand to $20 billion by the year 2020. With the potential exposure so vast there’s a clear need for reinsurance capital, suggesting opportunities for ILS markets.

There is a risk that some reinsurance companies may have picked up “unintended aggregations” as they fight to retain business and compete their way through the soft market cycle, which presents a risk of certain firms facing larger than expected losses, according to Fitch Ratings.

The World Bank has again stressed the importance of innovative products from, and engagement with, the risk transfer industry, the World Bank’s message brings to mind the benefits of insurance-linked securities (ILS) structures.

The abundance of capacity in the property catastrophe and retrocession reinsurance sector continues to contribute to a challenging environment, and signs are beginning to show of a change to the reinsurance market cycle owing to the fungibility of capital, says Markel CATCo.

London market insurance and reinsurance players have historically benefited from playing the re/insurance cycle, but in today’s highly competitive marketplace, post-event profits for the London market are under threat from sidelined capital, says A.M. Best.

The magnitude 6.2 earthquake which struck the Umbria region of Italy overnight is not expected to be strong enough to trigger the Azzurro Re I Limited catastrophe bond, according to Zurich, Switzerland based ILS fund manager Plenum Investments.

The appetite of the Canada Pension Plan Investment Board (CPPIB) to invest in insurance and reinsurance linked assets remains strong, with reports suggesting the $287.3 billion pension fund is in talks to acquire AIG’s Lloyd’s of London assets.

A magnitude 6.2 earthquake has struck overnight in the Umbria area of Italy, with early reports of 10 deaths, people still trapped and widespread damage to buildings and structures in the affected region.

The continued growth of private cat bond and ILS deals continued in the second-quarter of 2016, helping to offset a notable deterioration in traditional 144A issuance and a high volume of maturities that resulted in a decline of the outstanding market size, according to GC Securities.