Catastrophe bonds and insurance-linked securities news

A new, U.S. severe thunderstorm (STS) scenario model has been launched by Aon Benfield’s catastrophe model development team, Impact Forecasting, which will assist sponsors and investors in the catastrophe bond space to better understand U.S. thunderstorm risks.

GC Securities was involved in more than $2.4 billion of catastrophe bond and insurance-linked securities (ILS) transactions during 2015, growing its contribution to the outstanding market, according to data from the Artemis Deal Directory.

A more balanced ratio of buyers to sellers in the secondary market for catastrophe bonds resulted in a greater degree of equilibrium during January 2016, helping to support and stabilise prices, while the market saw elevated liquidity thanks to post-renewal portfolio adjustments.

U.S. military mutual insurer USAA’s new catastrophe bond, the Espada Reinsurance Limited (Series 2016-1) transaction, is set to complete at the lower end of the insurers volume ambitions, securing just $50m of reinsurance, while the pricing has been set at the top-end of guidance.

According to reports, which seem to confirm a rumour that has been doing the rounds of the ILS and reinsurance convergence space for some weeks, ILS and captive management firm Kane Group is set to be sold to Artex Risk Solutions.

Two of the LI Re private catastrophe bond deals, issued through reinsurance firm Hannover Re’s segregated accounts vehicle Kaith Re Ltd., have had their maturity dates extended, possibly signalling the potential for losses.

Investment management and investment services banking group BNY Mellon increased its catastrophe bond market share during 2015, acting as a global trustee for 52% of transactions by dollar volume, up from 36% in 2014.

U.S. insurer Nationwide Mutual is returning to the catastrophe bond market for the first time in almost three years, as it seeks to sponsor a $225m Caelus Re IV Ltd. (Series 2016-1) U.S. multi-peril cat bond to secure collateralised capital markets backed reinsurance capacity.

Bermuda’s mature, sophisticated regulatory environment has aided its development into a world-leading hub for reinsurance and insurance-linked securities (ILS) business, and according to Appleby’s Brad Adderley, change in regulation has enhanced business opportunities, not diminished them.

Florida headquartered Heritage is back with a new catastrophe bond transaction, Citrus Re Ltd. (Series 2016-1), seeking $250m of reinsurance from the capital markets for its Heritage Property & Casualty Insurance and Zephyr Insurance Company subsidiaries.