Catastrophe bonds and insurance-linked securities news

Catastrophe bonds are increasingly seen as a financial structure and instrument that could secure and disburse financing for humanitarian response in a more efficient manner, with researchers and institutions now investigating how the cat bond could be utilised.

The reinsurance market evolution continues and as ever alternative capital and the insurance-linked securities (ILS) market is placed centre stage in any discussion of the disruption of traditional business models, but now that the payback model of the past has expired, a new and more symbiotic model with ILS is emerging.

Offshore focused law firm Carey Olsen Bermuda has announced the hire of Gavin Woods, a lawyer with considerable experience in the ILS, catastrophe bond and collateralized reinsurance space gained in his most recent role at Appleby.

Hurricane Lane continues to track towards the Hawaii island chain as a category 3 storm this morning with sustained winds of up to 120 mph, some higher gusts and it remains the rainfall impacts that are most severe currently and any reinsurance or ILS market exposure is likely through aggregate contracts.

With FEMA having successfully tapped the capital markets for a mid-year 2018 transfer of risk from the National Flood Insurance Program (NFIP) through its first catastrophe bond, broker Craig Poulton of Poulton Associates, has said that while it’s a positive move, more granularity will ultimately benefit the market in time.

Arch Capital Group garnered significantly more capital market investor support for its latest and largest mortgage insurance-linked securities (ILS) transaction, with 26 investors backing its $653.3 million slice of collateralized mortgage reinsurance from the Bellemeade Re 2018-2 Ltd. transaction.

The latest mortgage insurance linked securities (ILS) transaction to hit the market has now been priced, as Bermudian re/insurer Arch Capital Group moves closer to securing a new $653.3 million slice of collateralized mortgage reinsurance with the Bellemeade Re 2018-2 Ltd. transaction.

The California Earthquake Authority, the not-for-profit residential earthquake insurance provider, is returning to the capital markets for another slice of reinsurance protection with a new Ursa Re Ltd. (Series 2018-1) catastrophe bond that targets up to $250 million of coverage.

Singapore’s ambitions and efforts to become a global hub for insurance-linked securities (ILS) business in Asia is expected to “bear fruit in the near future,” according to Fitch Ratings.

The way the insurance-linked securities market has bounced back from the hurricane losses of 2017 to achieve further growth into 2018 amid strong catastrophe bond issuance, is evidence of the continued utility of cat bonds and the robustness of ILS, according to Aon Securities.