Catastrophe bonds and insurance-linked securities news

The second catastrophe bond from specialty insurance and reinsurance company Fidelis Insurance Holdings Limited may increase in size before close, as its target for the Herbie Re Ltd. (Series 2020-2) issuance has risen to as much as $300 million.

Price guidance has narrowed towards the upper-end of the marketed range for the new La Vie Re Limited (Series 2020-1) mortality catastrophe bond transaction from life insurer and part of the Securian Financial Group, Minnesota Life Insurance Company.

The collateralized reinsurance market segment of insurance-linked securities (ILS) is expected to contract further, according to broker Aon, although it will likely remain the largest segment of ILS for the foreseeable future it seems.

While reinsurance and retrocession are heading full-tilt into a hard market in terms of pricing, the increasing focus on precision of wordings and terms are set to result in 2021 portfolios that could deliver significantly higher risk-adjusted returns for some.

U.S. primary mutual insurer USAA is back in the catastrophe bond market with its second transaction of 2020, a Residential Reinsurance 2020 Limited (Series 2020-2) deal that seeks $300 million of multi-year, fully collateralized, multi-peril catastrophe reinsurance protection from the capital markets for the carrier.

A survey of institutional investors allocation preferences for private asset classes shows a “notable” increase in interest in insurance-linked securities (ILS) at this time, according to global investment manager Schroders.

The United States Congress has been urged to consider making it more attractive to issue insurance-linked securities (ILS) onshore, as this would make it easier for public and private entities in the country to access the capital markets for risk transfer, Joanna Syroka of Fermat Capital Management has said in testimony.

The Artex Risk Solutions owned segregated account reinsurance transformer platform, Artex SAC Limited, has completed issuance of the first private catastrophe bond seen from the vehicle in 2020, with a $30 million Artex SAC Limited – Tenby Notes transaction.

Demand for reinsurance and retrocessional protection in the form of industry loss warranties (ILW’s) increased due to the COVID-19 pandemic and favourable market conditions are expected to persist, with a chance of higher demand again towards the end of this year, City National Rochdale has explained.

Catastrophe bond and insurance-linked security (ILS) rates-on-line retreated during the third-quarter of 2020, as the expected effects of seasonality hit one of the market benchmarks, the synthetic ILS rate-on-line Index calculated by Lane Financial.