Archive for November, 2019

The biggest issues facing the insurance-linked securities (ILS) market today, all surround the terms and contractual language related to collateral lock-up and commutations, while loss buffer tables have been seen to cause particular problems as they are often too simplistic, speakers said at an event yesterday.

Parts of France and Italy have been hit by a so-called “Mediterranean episode” in the last week, which drove torrential rainfall and flooding from November 21st to 24th and could drive economic losses of more than one billion Euros.

A recent survey of 200 Chief Investment Officers (CIO’s) and investment team members from the life, property and casualty, insurance and reinsurance sector found that 18% of respondents are already holding some insurance-linked securities (ILS) within their investment portfolios.

Nephila Capital is taking a “disciplined approach to long-term value creation” according to Markel Co-CEO Richie Whitt, who said that the flagship insurance-linked securities (ILS) unit of the carrier remains on target for the year.

As Lloyd’s of London seeks to develop initiatives to attract more third-party, ILS and alternative reinsurance capital to it, rating agency A.M. Best warns of a number of considerations it feels are key for the market to consider.

A particularly interesting and novel catastrophe bond transaction has been launched to the market, with the Sierra Ltd. (Series 2019-1) deal seeking $150 million of parametric U.S. earthquake protection for an investment manager that largely invests in mortgage related assets.

Capsicum Re, the specialty reinsurance brokerage established as a joint-venture between broking and service group Arthur J. Gallagher (AJG) alongside sector veterans Grahame “Chily” Chilton and Rupert Swallow, is set to move to 100% AJG ownership after terms were agreed.

Typhoon Kammuri is eyeing the Philippines with the potential to intensify into a super typhoon just days after the launch of the country’s first catastrophe bond that provides it with $150 million of tropical cyclone disaster insurance protection from the capital markets.

The catastrophe bond market has “never been busier” and we should expect to see significant issuance over the coming months, while the rest of the insurance-linked securities (ILS) market faces a more challenging period around the renewals, according to industry executives.

For capital markets investors it’s likely that cyber meets some of their investment needs, but a substantial lack of modelling capabilities means there’s no immediate, quick way for insurance-linked securities (ILS) to get into the space, according to cyber risk and (re)insurance experts Hans-Joachim Guenther and Peter Hacker.