Catastrophe bonds and insurance-linked securities news

The portfolios of reinsurance and retrocessional risk transferred to the capital markets, through catastrophe bonds and other insurance-linked securities (ILS), in 2023 are potentially the cleanest ever seen, while record cat bond issuance is a possibility this year, K2 Advisors has said.

As we’ve been reporting for some weeks now, there is increasing evidence in the way catastrophe bonds are pricing that rates for reinsurance and retrocessional coverage from the cat bond market are now coming off the top of the hard market.

Despite continued uncertainty over the potential for catastrophe events to cause losses to a number of its catastrophe bonds, Everest Re says that as of the end of 2022, no covered events had attached to drive any recoveries under its in-force Kilimanjaro Re catastrophe bonds.

Annual aggregate catastrophe bonds sponsored by US primary insurance giant Allstate could come under some pressure, as the firms aggregated annual catastrophe losses across the Sanders Re cat bonds risk period soared to almost $3.67 billion after a heavy March hit from severe storms.

Judy Klugman, the Global head of ILS Distribution and Sales at reinsurance giant Swiss Re and a long-standing and well-known leader in the catastrophe bond and insurance-linked securities (ILS) space, is departing the firm at the end of June.

The insurance-linked securities (ILS) grant scheme in Singapore has been a significant help in the country attracting catastrophe bonds and other ILS activity and it has now been extended by a further three years, to run until the end of 2025.

With an improved reinsurance market outlook, new capital is now expected to flow in once earnings delivery has been confirmed in reported results, Aon’s Mike Van Slooten has said.

A report from Conservative UK lawmakers that calls for greater Parliamentary accountability of regulators in the country, has cited the UK insurance-linked securities (ILS) experience as an example of regulatory failure to foster a new market opportunity.

Asset management giant PIMCO is closing down its dedicated insurance-linked securities (ILS) investment platform, citing a lack of alignment with its long-term vision and business priorities, as well as challenges in achieving business scale.

Catastrophe bonds are typically a risk transfer structure protecting an insured or reinsured against losses that affect its portfolio, which normally means a focus on loss and damage to physical assets. But increasingly interruption and people’s humanitarian needs are coming into the coverage equation, with broker Aon pioneering some of these moves according to its […]