Catastrophe bonds and insurance-linked securities news

The average return across insurance-linked securities (ILS) and reinsurance linked investment funds was 0.4% in July 2016, as premium allocation rose due to the U.S. hurricane season but still three of the ILS funds tracked reported negative returns due to the continued impact of losses.

The Centre for Global Development (CFGD) has highlighted the growth of the catastrophe bond market as an efficient and “simple” means of insuring natural disasters, but stresses that for the most part, coverage hasn’t reached the most vulnerable and poorest parts of the world.

Compared with more developed regions, the Asian insurance and reinsurance market remains small, resulting in less concentration and focus on the tail risk. However, when penetration grows and the tail risk becomes more important there ILS’ role in Asia will grow, says Lixin Zeng.

Cyber risk is reportedly the fastest growing insured peril across the global property/casualty (P/C) insurance space, with the market forecast to expand to $20 billion by the year 2020. With the potential exposure so vast there’s a clear need for reinsurance capital, suggesting opportunities for ILS markets.

The World Bank has again stressed the importance of innovative products from, and engagement with, the risk transfer industry, the World Bank’s message brings to mind the benefits of insurance-linked securities (ILS) structures.

The magnitude 6.2 earthquake which struck the Umbria region of Italy overnight is not expected to be strong enough to trigger the Azzurro Re I Limited catastrophe bond, according to Zurich, Switzerland based ILS fund manager Plenum Investments.

A magnitude 6.2 earthquake has struck overnight in the Umbria area of Italy, with early reports of 10 deaths, people still trapped and widespread damage to buildings and structures in the affected region.

The continued growth of private cat bond and ILS deals continued in the second-quarter of 2016, helping to offset a notable deterioration in traditional 144A issuance and a high volume of maturities that resulted in a decline of the outstanding market size, according to GC Securities.

Welcome to the Artemis ILS Asia 2016 post-conference report, which offers an insight into some of the discussions that took place on stage as well as between speakers and attendees during the first Artemis event in the region.

A range of structural trends were evident in the first-half of 2016 that have benefitted cedents in the catastrophe bond and insurance-linked securities (ILS) market, according to analysis from GC Securities.