Insurance Linked Investments

The relative performance of Hiscox’s insurance-linked securities (ILS) funds drove investor interest in deploying more capital to them, leading to the significant fundraising success reported recently, Hiscox Group CEO Aki Hussain explained.

AlphaCat Managers, the insurance-linked securities (ILS) and collateralized reinsurance investment manager entity owned by insurance giant American International Group (AIG), experienced outflows during the second-quarter, as its overall assets under management fell.

Once again, the catastrophe bond fund market saw its returns affected by continued spread widening during the month of June 2022, but insurance-linked securities (ILS) funds focused on private ILS and collateralised reinsurance investments did not fare much better.

This weekend it was reported that Japanese insurance group MS&AD Holdings, through its Mitsui Sumitomo Insurance unit, has made an at least $400 million bid to acquire hybrid P&C program, fronting and risk transformation company Transverse Insurance Group.

The new Lloyd’s sponsored protected cell company that was announced last week, London Bridge 2 PCC Ltd, represents “an efficient mechanism” for both existing and new investors to access risk from the Lloyd’s market, according to Clifford Chance.

Global insurance and reinsurance company Everest Re ceded fewer premiums to its third-party capital investors in Mt. Logan Re during the first-half of 2022, but also positively for returns from the vehicle fewer losses were ceded to it as well.

TransRe, the reinsurance underwriting brand of the Alleghany Corporation, has continued its pull-back from property catastrophe reinsurance exposures during the second-quarter of the year, with another 17.2% reduction in premiums.

Traditional reinsurance carriers have taken significant losses from Australian insurance carriers in recent years, as a result of which their appetites have waned for some lower layers of reinsurance towers, forcing carriers to look at alternatives.

GAM Holding AG, the parent company to global asset manager GAM Investments, reported an impressive roughly US $500 million of net inflows to its catastrophe bond strategies in the first-half of 2022, including the funds managed by specialist Fermat Capital Management.

Hannover Re benefited from an increased recovery under its long-standing capital markets backed mortality swap arrangement by the end of the first-half of 2022, with the financial benefit from the retro hedge reaching EUR 88 million by the end of the period.