Archive for August, 2017

Swiss headquartered weather index insurance and parametric risk transfer specialist CelsiusPro AG has launched a new disaster insurance solution designed to rapidly pay out emergency cash when earthquakes or tropical cyclones strike.

As early estimates of damages from hurricane Harvey point towards an overall economic impact in the low tens of billions of dollars with flooding likely to have caused the majority, the National Flood Insurance Program’s (NFIP) reinsurance layer looks increasingly at risk of paying out.

Reinsurance and retrocessional reinsurance investment manager Markel CATCo said today that it does not expect any significant hit to the portfolio of its flagship listed fund, the CATCo Reinsurance Opportunities Fund Ltd., as long as the industry loss from hurricane Harvey’s wind and flood impacts remains below $10 billion.

The average return of insurance-linked securities (ILS) and reinsurance linked investment funds reached 0.57% in July 2017, as seasonal effects began to boost the return of the ILS investment market, despite some further erosion of private ILS contract deductibles from U.S. severe thunderstorms.

Analysts tracking the property casualty insurance and reinsurance industry believe that hurricane Harvey could cause as much as $20 billion (at the top end of estimates) of industry losses, but with flood expected to be the major driver over the wind and surge exposure.

Catastrophe bond fund managers are not anticipating any loss to their investment holdings due to hurricane Harvey, although the mark-to-market impact witnessed in recent days could cause a limited hit to net asset values as cat bond positions thought most at risk of a major Harvey hit recover.

Risk modelling firm AIR Worldwide has estimates that wind and storm surge damage related insurance industry losses from hurricane Harvey will range from $1.2 billion up to $2.3 billion, a figure set to fall far below the final flood related economic and even insured loss tally.

The catastrophe bond market dropped on Friday as hurricane Harvey approached the Texas coastline, reflecting a little nervousness among investors regarding a few outstanding cat bonds that were deemed the most exposed to the storm, based on the forecasts at the time.

The so-called “live cat” market came to life as hurricane Harvey approached the Texas coastline, eventually making landfall as a Category 4 storm, as re/insurers and some ILS funds looked to lock in last-minute protection and we understand that a number of ILW’s traded, but volume was relatively light, according to sources.

Hurricane Harvey made landfall around 03:00 UTC having intensified further as it approached the Texas coastline to a Category 4 storm with 130 mph sustained winds and a minimum central pressure of 938mb, according to NOAA data.