Catastrophe bonds and insurance-linked securities news

After a record-setting quarter for the catastrophe bond market in Q2 2021, the market is on record-breaking pace and issuance is expected to continue to be supported by capital inflows and also an expectation that more capital will be reallocated to cat bonds from other areas of insurance-linked securities (ILS), according to Aon Securities.

The environmental, social and governance (ESG) credentials of the insurance-linked securities (ILS) market have become a key driver for issuance activity, according to John Seo of Fermat Capital Management, LLC.

In emerging Asia, there are opportunities for insurance-linked securities (ILS), despite the perception that reinsurance markets across the region remain in a developing phase, according to William Ho, Chief Executive Officer (CEO) of MS Amlin Asia Pacific, and Head of Reinsurance for Asia, MS Amlin.

The Chinese government via its regulator has urged its insurance and reinsurance industry to focus on developing new products for disaster risk transfer and to help in covering more of the natural catastrophe risk in the country, given the current evident protection gap that exists.

MGIC Investment Corporation has returned to the capital markets in search of more collateralized reinsurance with its second mortgage insurance-linked securities (ILS) deal of the year, as it sponsors a roughly $398 million Home Re 2021-2 Ltd. issuance.

Arthur J. Gallagher (Gallagher) will continue to pursue its strategy of adding incremental acquisition opportunities as a way to grow its business, despite the Aon – Willis Towers Watson (WTW) deal collapse which has removed a potentially transformational deal opportunity from Gallagher’s reach.

Insurance and reinsurance broker Aon reported particularly strong growth for Q2, with 9% organic revenue growth in reinsurance overall, but double-digit growth in capital market transactions such as catastrophe bonds and insurance-linked securities (ILS).

The recent severe flooding in China’s Henan province is expected to result in the largest catastrophe insured losses in history for the country, clearly demonstrating the need for more reinsurance protection, as well as faster roll-out of primary covers.

To the reinsurance and insurance-linked securities (ILS) market, earthquake risk is one of the biggest peril threats in the world and one that the market can’t be complacent about, according to Paul Wilson, Head of Non-Life Analytics at Securis Investment Partners.

The Lloyd’s insurance and reinsurance market has put out a call for a coordinated effort to enhance the disaster resilience of developing and developed economies, by bringing together the re/insurance sector with investors and governments to create new financial solutions.