Catastrophe bonds and insurance-linked securities news

The wealth of alternative capital in the global reinsurance market could be utilised to increase demand and grow the overall reinsurance pie, creating opportunities for insurance-linked securities (ILS) to meaningfully enter new regions and perils, according to industry experts.

A Senate panel has passed a bill allowing the State of Oklahoma to establish an earthquake reinsurance fund, similar to that seen in California, ensuring the region has access to earthquake insurance following coverage inadequacy.

Japanese insurance group Mitsui Sumitomo Insurance Co. Ltd., a subsidiary of MS&AD Insurance Group Holdings, is returning to the catastrophe bond market with Akibare Re Ltd. (Series 2016-1) issuance, seeking $175m of Japan typhoon reinsurance protection.

Florida headquartered Heritage is set to secure $250m of reinsurance protection for its Heritage Property & Casualty Insurance and Zephyr Insurance Company subsidiaries from its new Citrus Re Ltd. (Series 2016-1) catastrophe bond transaction.

U.S. insurer Nationwide Mutual’s first visit to the catastrophe bond market in almost three years is looking promising for the firm, as it looks set to upsize the Caelus Re IV Ltd. (Series 2016-1) U.S. multi-peril cat bond to $300m at the low-end of initial price guidance.

The transparency of the insurance-linked securities (ILS) market alongside comprehensive third-party models, and sector sophistication underlines its differences from sub-prime mortgages, according to Aon Securities Chief Executive Officer (CEO), Paul Schultz.

The Australian Reinsurance Pool Corporation (ARPC) has rejected including any retrocessional reinsurance capital from ILS or collateralised markets in its recent $2.9 billion program renewal, as they price the risk above the traditional market.

The date has now been set for the 2016 running of the Bermuda Convergence 2016 networking event, with the ILS Bermuda steering committee announcing that this year will see the event held in Hamilton, Bermuda on November 9th and 10th.

Former Head of Capital Markets at insurance group AIG, Samir Shah, feels the insurance-linked securities (ILS) market’s efficiency would benefit from a single, credible rater of the risk.

Safepoint Insurance Company, an expansive insurer that began life as a Florida takeout player, is returning to the catastrophe bond market to add to its capital markets sourced reinsurance protection with a triple-tranche $100m Manatee Re Ltd. (Series 2016-1) deal.