Catastrophe bonds and insurance-linked securities news

Alternative reinsurance capital growth outpaced traditional reinsurance in 2015, increasing 21% to reach $70 billion. A decline in traditional reinsurance capacity was offset by continued expansion of ILS, helping total reinsurance capital grow to $427 billion, according to Willis Re.

The first-quarter of 2016 witnessed a record volume of catastrophe bond and insurance-linked securities (ILS) issuance, helped by continued investor appetite that met the capacity targets of market sponsors during the period, according to reinsurance giant Munich Re.

The record start to 2016 for the catastrophe bond and insurance-linked securities (ILS) market “bodes well” for the rest of the year, according to Paul Schultz of Aon Securities, particularly when the competitive nature of reinsurance markets are considered.

An issue has been bubbling away in the background of the catastrophe bond and ILS fund market since late 2015 which has the potential to impact the way managers of UCITS catastrophe bond funds deal with diversification.

The record level of catastrophe bond, or non-life insurance linked securities (ILS), issuance seen in the first-quarter of 2016 highlights the continued appetite institutional investors show for accessing ILS, as well as the appetite of cedents to access alternative capital, according to Willis.

The Actuarial Committee of the Texas Windstorm Insurance Association (TWIA), the residual market or last-resort property insurer for Texas, is set to seek approval to purchase slightly less first-event reinsurance protection in 2016, but may add a second-event cover.

The new $85m private catastrophe bond, or cat bond lite, transaction Resilience Re Ltd. (Series 1642B), which was issued using the platform owned by broker Willis Towers Watson, does feature California earthquake risk sourced from the California Earthquake Authority (CEA).

TigerRisk Partners LLC, the catastrophe reinsurance broker and risk/capital management advisor, has added insurance-linked securities (ILS) structuring expert Philipp Kusche to its ranks, as Partner and Global Head of ILS and Capital Solutions.

U.S. military mutual insurer USAA is returning to the capital markets for its latest, and 27th securitization of insurance risk, with a $150m, three tranche, Residential Reinsurance 2016 Limited (Series 2016-1) catastrophe bond.

An $85m private catastrophe bond, or cat bond lite, transaction has been issued using the platform owned by broker Willis Towers Watson, with the completion and listing of a Resilience Re Ltd. (Series 1642B) deal.