Catastrophe bonds and insurance-linked securities news

The World Bank Group aims to expand the use of sovereign disaster risk transfer instruments by the year 2020, hoping to add five more countries to those covered by instruments such as insurance, risk pools and contingent finance.

Reinsurance brokerage Aon Benfield underlined the continued, and impressive growth of multiple features of the insurance-linked securities (ILS) market during 2015, including ILWs, cat bonds, sidecars, and the rapidly expanding collateralized reinsurance space.

The U.S. National Flood Insurance Program (NFIP) needs to embrace risk-based pricing of flood insurance risks and leverage private risk transfer markets and reinsurance capital in order to reduce the burden and improve the flood insurance market, according to the ABIR.

Risk modelling firm RMS has launched a new cloud-based application that enables all insurance, reinsurance or insurance-linked securities (ILS) markets to model, create and price parametric risk transfer cat-in-a-box contracts.

The latest catastrophe bond report from Property Claims Services (PCS) has revealed that during the first-quarter of 2016 almost 60% of cat bond issuance that covered North American exposures utilised PCS data, translating to roughly two-thirds of U.S. exposed transactions.

Insurance-linked securities (ILS) and reinsurance linked investment funds reported their strongest performance since September, returning an average of 0.54% in February 2016, as some adjustments to loss reserves flowing through to boost the months performance.

Total global reinsurance capacity declined by 2% last year, standing at $565 billion at December 31st 2015. However, alternative reinsurance capital continued to increase its share of the overall market during the period growing by 12% to $72 billion, according to reinsurance broker Aon Benfield.

Our latest quarterly report on recent catastrophe bond and insurance-linked securities (ILS) issuance has now been published. The report, ‘Q1 2016 Catastrophe Bond & ILS Market Report – Another record first-quarter‘, analyses a record Q1 with $2.215 billion of issuance.

U.S. primary insurer State Farm has confirmed its commitment to sourcing reinsurance through the ILS market with a privately placed renewal of a maturing catastrophe in the form of a Merna Re Ltd. (Series 2016-1) transaction.

The evolution of the insurance-linked securities (ILS) space has seen its sponsors and investors reach an improved level of maturity; understanding that capital markets capacity is available throughout the year and not just around key renewals, according to GC Securities Cory Anger.