Catastrophe bonds and insurance-linked securities news

Knowledge and understanding of the insurance-linked securities (ILS) asset class is on the rise in Asia, and while local expertise is a real benefit, it’s also vitally important to communicate early and persistently with the investor base, according to industry experts.

The fragmentation of the Asia region means that for insurance-linked securities (ILS) managers, it’s more practical to focus on the locations with the more mature and larger institutional market, according to Timothy Yip, Executive Director at ILS Advisers.

Highlighted by the efforts of Singapore and more recently Hong Kong, there’s an exciting and growing opportunity for the insurance-linked securities (ILS) sector to play a meaningful role in the Asia region, according to industry experts.

The return of catastrophe bond and insurance-linked securities (ILS) funds as a group was above average in May 2021, at 0.58%, and even if you subtract the extraordinary boost one fund got due to what is expected to have been wildfire subrogation recoveries, the average ILS fund return was still better than the long-term mean.

As options to issue insurance-linked securities (ILS) and catastrophe bonds expand in Asia, with the introduction of Hong Kong as a regulated ILS platform, attendees at our virtual ILS Asia 2021 conference this morning heard of the support China’s government is offering to the initiative.

The industry-loss warranty (ILW) focused mutual fund strategy offered by investment adviser City National Rochdale (CNR) has grown its net assets by roughly 9% during the last quarter of record.

Climate change is not expected to impact all forms of investment in insurance-linked securities (ILS) uniformly, according to Twelve Capital, which means for ILS investors and managers, analysing climate exposure, as well as establishing and updating a house view on risk is key.

Reinsurance broker Guy Carpenter is teaming up with other global Marsh McLennan businesses for a joined-up approach on delivering a holistic range of climate risk focused services and advisory, part of which is risk transfer related and includes catastrophe bonds.

The first catastrophe bond to benefit the Caribbean island nation of Jamaica has now been launched to investors, with the IBRD CAR 130 transaction, that is being issued via the World Bank, set to provide the Government with a $175 million or greater source of named tropical storm and hurricane disaster insurance protection.

According to sources, the Astro Re Pte. Ltd. (Series 2021-1) catastrophe bond, that is being sponsored by U.S. primary insurance group Frontline Insurance on behalf of itself and subsidiary First Protective, is set to shrink to $40 million in size, with pricing at the high-end of guidance.