Catastrophe bonds and insurance-linked securities news

The Asia-Pacific Economic Cooperation (APEC) continues to see the development of a regional catastrophe bond market as positive, highlighting at a recent workshop that cat bonds are a win-win relationship for governments and investors.

Retrocessional reinsurance coverage written by rated carriers, as well as other insurance-linked securities (ILS) products such as industry-loss based instruments, may find themselves in favour over collateralized ultimate net loss retro at the upcoming renewals, Aon executives said recently.

Climate change, variability and the expected increases in Atlantic hurricane risk that these factors will drive, is still likely to be compensated for in catastrophe bond and private insurance-linked securities (ILS) coupons, as pricing should rise and consequently returns, in line with the risk, according to ILS manager Twelve Capital.

The development and growth of an insurance-linked securities (ILS) market in Asia can only be a benefit to local insurance and reinsurance carriers, as well as those operating regionally, as the capital markets capacity can help them expand their ability to underwrite and diversify capacity sources, rating agency Fitch explained recently.

Reinsurance Group of America (RGA) has explored a variety of ways of transferring mortality risks related to pandemics off its books, including capital markets backed instruments such as catastrophe bonds.

When it comes to building a portfolio of insurance-linked securities (ILS) and reinsurance linked investments, there is more to quality and return potential than simply following models, according to Chin Liu of Amundi Pioneer.

A working group of the Indian insurance and reinsurance regulator IRDAI has proposed the creation of a parametric Indian Pandemic Risk Pool, which could use pandemic bonds as part of its capacity.

Isosceles Insurance Limited, the transformer and segregated cell structure operated by Marsh & McLennan Companies and reinsurance broker Guy Carpenter to issue privately placed insurance-linked securities or catastrophe bonds has completed issuance of another transaction.

Reinsurance cedants and buyers are increasingly looking to catastrophe bonds as options for accessing alternative sources of reinsurance capital, a new survey from rating agency Moody’s has found.

Hurricane Sally’s extreme rainfall and storm surge are expected to drive significant insured losses for the National Flood Insurance Program (NFIP), putting its reinsurance panel and catastrophe bond investors on alert, according to A.M. Best.