Catastrophe bonds and insurance-linked securities news

Alphabet, Inc., the holding company for Google and its many units, has entered the catastrophe bond market for the first time, as the technology giant seeks $237.5 million of earthquake insurance protection that will be fully collateralized through the issuance of a Phoenician Re Ltd. (Series 2020-1)  cat bond transaction to capital market investors.

Allied World Assurance Company (AWAC), a global insurance and reinsurance company and part of the Fairfax Financial group, is set to sponsor its first ever catastrophe bond, with a $150 million targeted issuance of this new 2001 CAT Re Ltd. (Series 2020-1)  multi-peril transaction.

The market for catastrophe bonds and related insurance-linked securities (ILS) has already broken the annual record for number of deals issued in 2020, as this year remains on-track to break the record for the dollar-amount issued as well.

The Bureau of the Treasury of the Republic of the Philippines has issued notice to the calculation agent for its World Bank facilitated IBRD CAR 123-124 catastrophe bond transaction that it believes recent super typhoon Goni to be an applicable event that requires a calculation of the modelled losses to be undertaken.

September 2020 saw the strongest level of returns from the insurance-linked securities (ILS) market in a year, as the average ILS fund return was reported as 1.08% by ILS Advisers.

American Family Mutual Insurance Company is targeting an upsized $175 million of collateralized multi-peril reinsurance from its Four Lakes Re Ltd. (Series 2020-1) catastrophe bond issuance, the carriers first cat bond in a decade.

The Florida Hurricane Catastrophe Fund’s (FHCF) ultimate loss from 2017’s hurricane Irma has continued to creep higher in 2020, rising from $6 billion booked at the end of 2019 to $6.5 billion as of October 2020.

An intriguing new catastrophe bond transaction has launched to the market according to our sources, with the $50 million Power Protective Re Ltd. (Series 2020-1)  transaction being sponsored on behalf of a municipal water and electricity utility operating in the Los Angeles area of California that is seeking wildfire insurance protection.

Highlighting the truly exceptional level of severe weather and natural catastrophe activity in 2020 so far, Property Claim Services (PCS) has already designated a record number of PCS Catastrophe events, with just over two months of the year left to run.

Hurricane Zeta’s wind and storm surge impacts on Mexico and the United States are expected to cost the insurance and reinsurance market close to $4.4 billion, according to an early estimate from Karen Clark & Company.