Catastrophe bonds and insurance-linked securities news

With catastrophe bond spreads having widened in recent weeks due to market dynamics and interest rates forecast to rise, it’s currently possible that a catastrophe bond fund investment could yield as much as 8% to 9% next year.

Our sources have told us that the new Manatee Re II Ltd. (Series 2022-1) catastrophe bond that was designed to secure U.S. primary insurer Safepoint Insurance Company a $125 million or larger source of named storm reinsurance protection from the capital markets now won’t be issued.

UK parliamentary group, the House of Lords Industry and Regulators Committee, has told the government that following an inquiry into commercial insurance and reinsurance regulation, it believes the “inflexible culture” of the regulators has held back the countries ambitions to develop new forms of business.

Global reinsurance company Swiss Re gave some insights into its growing Alternative Capital Partners business this morning, explaining that the annual fee income earned from alternative reinsurance capital activities and insurance-linked securities (ILS) management is on track for US $100 million.

Alternative reinsurance capital, so the capital that is largely supplied by insurance-linked securities (ILS) fund managers, grew by 4% to reach $94 billion in 2021, according to broker Gallagher Re.

There is evidence of progression in the collateralized reinsurance (CRI) and sidecar marketplace, as updates to terms and conditions show some promise, according to Gallagher Securities.

Coastal property insurance underwriter SURE, or the SureChoice Underwriters Reciprocal Exchange, is seeking its debut catastrophe bond, with a new $150 million US wind focused Gateway Re Ltd. (Series 2022-1) transaction now launched to investors.

Insurance-linked securities (ILS) fund strategies delivered muted performance in February 2022, with catastrophe bond funds affected by market dynamic related pricing pressure, while some private ILS fund strategies experienced impacts to aggregate positions.

American Integrity Insurance Company of Florida, Inc. has returned to the catastrophe bond market with its fifth issuance, Integrity Re Ltd. (Series 2022-1), to replace and expand on maturing coverage and with a target for $125 million or more of Florida named storm reinsurance protection.

Direct-to-consumer and fast-growing insurtech Kin Insurance has now priced its debut Hestia Re Ltd. (Series 2022-1) catastrophe bond issuance at a size of $175 million, with the coupon investors will receive finalised at the top-end of initial guidance.