Archive for June, 2018

While it sometimes feels as if insurance-linked securities (ILS) and reinsurance linked investments are almost mainstream, there is still a way to go before the asset class truly becomes a staple of the major institutional investors of this world, as evidenced in the results of a recent survey by Mercer.

The Texas Windstorm Insurance Association (TWIA), the residual market property insurer for the Texas coast, completed a successful 2018 reinsurance placement recently with the combined coverage of catastrophe bonds and traditional coverage helping to ensure it is there to support its policyholders when disasters strike.

Resilience Re Ltd., the private catastrophe bond issuance platform owned and operated by insurance and reinsurance broker Willis Towers Watson, has completed another new issuance, with the placement of a $37 million Resilience Re Ltd. (Series 1861A) transaction.

Bermuda headquartered insurance and reinsurance firm Arch Capital Group has increased the amount of third-party capital under its management in insurance-linked securities (ILS) related assets by 20% to $600 million in the last year.

“Prospects for a second straight busy hurricane season have diminished markedly,” according to Phil Klotzbach of the Colorado State University tropical forecasting team, as cooler Atlantic sea surface temperatures point to “profound impacts” for the 2018 hurricane season.

Bernina Re Ltd. has been established and launched by the Credit Suisse Insurance Linked Strategies Ltd. team as a new reinsurance company, with the goal that Bernina Re should become the flagship reinsurance platform for the Credit Suisse ILS offering.

As the catastrophe bond market looks to expand outside of the natural catastrophe space, terrorism risk has been highlighted as a potential growth avenue for the insurance-linked securities (ILS) sector, but while new perils bring diversification benefits, it’s essential the risk is quantifiable.

Nephila Climate, the weather and climate risk focused unit of ILS and reinsurance investment giant Nephila Capital, and often partnering insurer Allianz have together completed the first wind farm proxy revenue swap transaction in Australia, hedging price and volume risks including weather exposure for a new wind farm project in Victoria.

Florida’s Citizens Property Insurance Corporation said that a recent surge in claims related to non-weather water losses in South Florida has increased its costs enough to offset the lower cost of reinsurance and other risk transfer, resulting in the need for a proposed statewide average rate increase of 7.9%.

Absent further major losses hitting global reinsurance and insurance-linked securities (ILS) markets this year, the expectation now is that rates are likely to lose any ground gained at renewals so far this year and return to a slow softening trend in 2019, according to analysts at Deutsche Bank.