Catastrophe bonds and insurance-linked securities news

Tropical storm Delta has quickly intensified to become Category 2 hurricane Delta as it moves through the Caribbean and the hurricane is now expected to reach major status, of Category 3 or higher, as it moves towards a landfall on the central U.S. Gulf Coast at the end of this week.

Catastrophe bond fund returns led the way through August 2020 with another strong month, while private ILS and collateralised reinsurance suffered a little as a string of catastrophe events eroded aggregates and caused some declines in return.

Fidelis has returned to the catastrophe bond market for its second transaction, as the company looks to embed the capital markets more deeply within its reinsurance program arrangements with a $175 million Herbie Re Ltd. (Series 2020-2) issuance.

As expected, it appears there have been a wide range of results for August among insurance-linked securities (ILS) funds, as severe storm and hurricane activity drove some to suffer losses, while others absorbed the impact within their income and still delivered positive performance for the month.

A new mortality catastrophe bond transaction is in the market, as life insurer and part of the Securian Financial Group, Minnesota Life Insurance Company looks to the capital markets for $100 million of more of mortality related life reinsurance through a La Vie Re Limited (Series 2020-1) deal.

The catastrophe bond market saw continued positive momentum throughout the third-quarter of 2020 and despite continued financial market uncertainty and volatility as a result of the Covid-19 pandemic, the result was an above-average quarter of issuance, according to the latest report and data from Artemis.

Analysts from Jefferies said they would advise specialty insurance and reinsurance firm Beazley to look to securing additional reinsurance capital, over other funding sources such as another equity raise, after the firm reported escalating losses and given the active levels of catastrophe loss activity seen.

The catastrophe bond market pipeline is expected to be busy through the third and fourth quarters of 2020, according to Aon Securities CEO Paul Schultz, which sets the stage for potential near-record levels of issuance this year.

The California Earthquake Authority (CEA) is back once again in the catastrophe bond market with the second issuance it has sponsored so far this year, seeking a $250 million or larger source of collateralised earthquake reinsurance from this Ursa Re II Ltd. (Series 2020-1) deal.

The opportunity to takeout insurance policies from Florida’s Citizens Property Insurance Corporation may return once again, as the insurers portfolio is expanding faster than it expected and it feels some of the book may be attractive.