Catastrophe bonds and insurance-linked securities news

Hong Kong’s Insurance Authority (IA) is set to increase its efforts to promote its nascent insurance-linked securities (ILS) framework and attract more catastrophe bond or ILS issuance activity to the country.

Kirby Wisian, a long-standing executive at USAA who has been instrumental in the primary military mutual insurers’ use of the insurance-linked securities (ILS) market and its regular Residential Reinsurance catastrophe bonds, is retiring from the company.

Cyber risk modelling specialist CyberCube has launched a set of exposure databases for cyber risk, claiming them as the first of their kind, something seen as a key pre-requisite for broader cyber insurance-linked securities (ILS) activity.

USAA, the U.S. primary mutual insurer, has returned to the catastrophe bond market with a $150 million Residential Reinsurance 2022 Limited (Series 2022-2) that will be its 40th issuance and as the first cat bond since hurricane Ian, the deal provides a first glimpse of the post-Ian pricing environment.

Catastrophe bond funds, as measured by the Plenum CAT Bond UCITS Fund Indices, continued to decline in the last week, falling another average of nearly half a percent, bringing them to a -6.5% decline on average since hurricane Ian made landfall.

Secondary market trading of catastrophe bonds has accelerated as the market moves further beyond the initial impact of hurricane Ian, with activity rising, but the majority of trades still focused on diversifying peril cat bonds.

Direct-to-consumer and fast-growing insurtech company Kin Insurance has detailed its current expectations for the impacts of hurricane Ian to its business, which suggests reinsurance recoveries are anticipated and that its Hestia Re Ltd. (Series 2022-1) catastrophe bond should be considered at-risk of triggering.

The catastrophe bond market index calculated by Swiss Re Capital Markets stabilised at its last calculation on Friday 14th October 2022, with a slight rise seen due to spread widening as secondary trades picked up pace following hurricane Ian.

Realised losses from hurricane Ian for the catastrophe bond market could end up being as little as half the initial, and still current, mark-to-market decline in the outstanding cat bond market, sources have told Artemis and our analysis also backs this up.

US primary insurance giant Allstate has pre-announced a range of items that added up to make the third-quarter a particularly challenging one for the company, but positively for the carrier its reinsurance tower has responded to losses from hurricane Ian and a $305 million recovery is anticipated.