Catastrophe bonds and insurance-linked securities news

Back on July 10th we reported on a new $45.5 million Randolph Re (Series 2024-1) private catastrophe bond that appeared to be a renewal of a wildfire transaction for Mercury Insurance and for the first time Aon had used its Guernsey based protected cell company White Rock Insurance Company PCC Limited for the issuance.

On average, catastrophe bond loss multiples are not expected to fall back much further, as the capacity providers in the reinsurance market, including insurance-linked securities (ILS) fund managers and investors, are still motivated to hold onto the gains recently made, according to AM Best.

Investing into an asset class like reinsurance whose performance is not influenced by movements in global share prices is seen as a “powerful way to build more robust, resilient portfolios” by MLC Asset Management’s Gareth Abley, who also disclosed that the MLC catastrophe bond and ILS portfolio has averaged an impressive cash +5% return over […]

Unless there are “substantial” losses to insurance-linked securities (ILS) from catastrophe events in the second-half of 2024, Fitch Ratings said it expects “continued strong supply growth in the alternative reinsurance capital market into 2025.”

The recent and first ever ‘megaquake’ warning issued by authorities in Japan has heightened the perception of the peril’s risk and even though the warning was eventually lifted, it is seen as a factor that could be supportive of reinsurance pricing for that country, by analysts at J.P. Morgan.

Dr. Nigel Clarke, the Minister of Finance of Jamaica and the driver of that country’s multi-layered approach to disaster risk financing that includes the first catastrophe bond for a small-island state has been proposed to become a Deputy Managing Director of the International Monetary Fund (IMF).

Concerns over how a cyber catastrophe loss event could manifest mean many insurance-linked securities (ILS) investors remain cautious when it comes to considering allocating to cyber catastrophe bonds and reinsurance, but interest continues to rise and broker Lockton Re expects more efficient capital will flow to cyber risks in time.

Pool Re, the UK government backed mutual terrorism reinsurer, appears to be set to return to the catastrophe bond market, announcing this morning that it has signed up Aon Securities and Howden Capital Markets & Advisory as its insurance-linked securities (ILS) advisors.

The recent CrowdStrike related global IT outage event has shown that it is essential to have specialised knowledge about cyber risks in order to effectively invest in cyber catastrophe bonds, insurance-linked securities (ILS) and reinsurance focused asset manager Twelve Capital has said.

In time, as wildfire risk models advance and the market becomes more accepting of them, Guy Carpenter executives suggest investor confidence may increase, resulting in a growing willingness to deploy ILS capital to support the California market’s need for wildfire protection.