Catastrophe bonds and insurance-linked securities news

Lockton Re, the reinsurance arm of the independent broking group, has hired Theo Norris from Gallagher Re to become its first Head of Cyber ILS.

The Schroders Capital insurance-linked securities (ILS) team has successfully increased its ILS assets under management (AUM) to a new high of $5.5 billion by the end of March, representing approximately 25% growth in just one year.

More than half of the insurance and reinsurance entities registered by the Bermuda Monetary Authority (BMA) in the first-half of 2024 were destined for catastrophe bond, collateralized reinsurance, or other insurance-linked securities (ILS) use-cases.

Despite the recent spread widening seen in catastrophe bonds, K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, continues to favor the insurance-linked securities (ILS) asset class and cat bonds in particular remain its top-pick sub-strategy, while its conviction on private ILS and retrocession has risen.

Issuance of private catastrophe bonds, or cat bond lites, has now reached $357.6 million in 2024, after two more privately placed insurance-linked securities (ILS) arrangements came to light from the Artex Capital Solutions managed Eclipse Re Ltd. structure.

The US cyber insurance industry loss from the recent CrowdStrike related IT outage is expected to come in below $1 billion, according to specialist insurer Coalition, with the company saying its modelling suggests a lower bound of $270 million or even lower, while the upper-bound is $960 million.

Artemis has learned of two new private catastrophe bond issuances from Mangrove Risk Solutions Bermuda Ltd., the platform operated by Marsh McLennan and reinsurance broker Guy Carpenter, with just over $39.5 million in risk capital issued across two zero-coupon transactions.

The recent global IT systems outage caused by the CrowdStrike event can serve to build more confidence in cyber catastrophe bonds, as some of the biggest questions posed about this new segment of insurance-linked securities (ILS) were about how losses from a major cyber event would manifest, Jonathan Hatzor, CEO of Parametrix told us.

CyberCube, a specialist modelling firm for cyber risks and exposures, has estimated that insurance industry losses from the CrowdStrike linked global IT outage for the standalone cyber insurance market will be between $400 million and $1.5 billion.

RenaissanceRe, the Bermuda based reinsurance and third-party capital management specialist, has reported its highest ever quarterly fee income from third-party capital and insurance-linked securities (ILS) activities, as higher assets under management (AUM) and strong performance drove a 48.3% year-on-year increase.