Archive for April, 2017

Two of the largest insurers in the U.S., Allstate and Travelers, have both revealed first-quarter 2017 catastrophe losses today and the higher than expected figures are likely to be reflected in a rising attritional hit to some ILS funds and collateralized reinsurance structures.

Insurance-linked securities (ILS) and alternative reinsurance capital continued to grow in 2016, rising from $70 billion by over 7% in the year to reach $75 billion, while at the same time the underlying return-on-equity (RoE) of the reinsurance sector has continued to shrink, according to data from Willis Re.

The latest private catastrophe bond issued through insurance, reinsurance and capital markets broker and advisory Willis Towers Watson’s platform has now completed, in the form of a $173 million Resilience Re Ltd. (Series 1741A) zero coupon transaction.

U.S. primary military mutual insurance group USAA is now set to secure $425 million of fully-collateralized reinsurance coverage through its new Residential Reinsurance 2017 Ltd. (Series 2017-1) catastrophe bond, with pricing settling at the bottom end of reduced guidance for two tranches, but at the top for a zero-coupon, riskier layer.

American Integrity Insurance Company of Florida, Inc.’s first catastrophe bond issuance has increased in size while being marketed to ILS investors, resulting in a $210 million target for the Integrity Re Ltd. (Series 2017-1) transaction at lower price guidance.

A number of forecasts have been released for the 2017 Atlantic Tropical Storm & Hurricane Season and so far all are calling for activity levels just below the long-term average, with the expectation that we will see a weak El Niño by the typical peak of the season suggesting a slower year.

Bringing insurance-linked securities (ILS) to London is clearly a hot topic and an important step for the regulators and facilitators in making London a modern, capital agnostic hub for global insurance and reinsurance business, but is it going to be enough to offer a competitive advantage?

Secondary trading activity of catastrophe bonds accelerated in March 2017, as the primary issuance market and pipeline of new deals picked up and investors and ILS fund managers used the marketplace to adjust portfolios and accommodate new deals.

The latest data from Impact Forecasting shows that U.S. severe thunderstorms and convective weather are estimated to have caused insurance and reinsurance markets at least $5.7 billion of losses, making the first-quarter of 2017 the most costly Q1 on record for this peril.

A Senate committee has been urged to consider legislation that would allow the National Flood Insurance Program (NFIP) to cede more risk to private reinsurance markets and to allow it “explicit access” to more “securities vehicles”, which could help the flood catastrophe bond cause.