Archive for August, 2018

Severe droughts, wildfires and flooding from torrential rain and typhoons have combined to cause in excess of $7 billion of economic losses in July 2018, with the insurance and reinsurance industry set to pay its share of the global bill.

Catastrophe bond and insurance-linked securities (ILS) issuance in the first-half of 2018 covered an unprecedented level of Latin America risks, as transactions focused on North America declined by almost half year-on-year, according to Property Claim Services (PCS).

Watford Re, Bermudian specialist re/insurer Arch Capital and asset manager Highbridge Principal Strategies third-party capital backed total-return reinsurance venture, continued its trend towards portfolio growth in the second-quarter, reporting another 15% jump in premiums underwritten.

There are a number of new domiciles and jurisdictions for locating and housing insurance-linked securities (ILS) transactions coming into view, but they will all have to go through the thorough testing that is required to ensure their robustness and flexibility, before success can be guaranteed.

A re-evaluation of California wildfire risks is required as the “highly destructive current and 2017 wildfires” have largely occurred in areas typically classified as low to moderate risk by insurance and reinsurance interests, leading A.M. Best to suggest that “improved loss-reduction strategies” need to be adopted to reflect this “new normal.”

Lloyd’s specialist insurance and reinsurance player Beazley’s special purpose arrangement (SPA) syndicate 5623 is set to offer its third-party investor backers access to a broad and diverse range of risks, with the facilities access likely to mean risks in the portfolio that typical ILS funds or strategies do not underwrite.

German reinsurance giant Hannover Re has continued to expand its underwriting portfolio in property & casualty reinsurance, increasing gross premiums written by over 19% in the second-quarter, but citing “fierce competition” and the effects of alternative capital in markets such as Florida.

As capital market investors increasingly look to access the relatively uncorrelated returns of insurance and reinsurance risk, their appetite is driving market expansion further into primary sources of insurance risk, with insurance now becoming a key area of growth for the ILS market.

The volume of new catastrophe bonds and related insurance-linked securities (ILS) transactions tracked by Artemis in 2018 has now reached $11 billion, outpacing 2017’s issuance so far, while at the same time the outstanding market has continued to grow to reach a new high of $36 billion.

Bermudian specialty insurance and reinsurance firm Aspen Insurance Holdings Limited is promoting Emil Issavi, currently President and Chief Underwriting Officer of Aspen Re, to become the leader for its global reinsurance business, as the previous CEO of Aspen Re is set to depart the firm.