Insurance Linked Investments

United States governmental authorities have concluded their investigations into retrocessional reinsurance investment manager Markel CATCo this week, with no action set to be taken.

ILS fund managers and reinsurance companies both need to demonstrate they can deliver the returns their investors are expecting, as it is clear that in 2021 “capital is not coming in at any cost,” according to Luca Albertini, CEO of London-headquartered Leadenhall Capital Partners LLP, a subsidiary of MS Amlin.

The development of a robust cyber retrocessional reinsurance market and the use of insurance-linked securities (ILS) or alternative capital, would help the cyber insurance market with its capital management and make much-needed capacity available, according to S&P Global Ratings.

Ledger Investing has launched its first insurance-linked securities (ILS) fund, a casualty risk focused strategy backed by a single investor, and an ILS management unit, Ledger ILS Managers LLC. While the firm plans a $300 million co-mingled casualty ILS fund strategy as well.

Hudson Structured Capital Management Ltd., which enters into insurance and reinsurance investment business as HSCM Bermuda, has participated as an investor in a $60 million Series B funding round for auto and rideshare focused insurtech company Buckle, expanding its investment in the company.

Giant asset manager BlackRock is aiming to raise more than $2.3 billion for its new environmental, social and governance (ESG) investment fund strategy that includes catastrophe bonds as one of its target asset types.

The steady growth of Stone Ridge Asset Management’s more catastrophe bond focused mutual insurance-linked securities (ILS) fund has continued in the last quarter of record, while at the same time the investment manager’s interval ILS fund strategy shrank further as it realised more losses and return of capital.

Arch Capital Group, the Bermuda headquartered specialty insurance and reinsurance company, eventually secured close to $508 million of mortgage reinsurance through its latest Bellemeade Re 2021-3 Ltd. mortgage ILS transaction, but added another $131.5 million of reinsurance from the traditional market at the same time.

We’re holding another live webcast on September 30th, register here, with a focus on how innovative techniques can enable investors to access the returns of insurance and reinsurance business, especially in the higher frequency, but lower severity life and P&C space.

Despite the fact more capital inflow to the insurance-linked securities (ILS) sector is expected and more new start-up capital is expected to launch in traditional insurance and reinsurance, rating agency AM Best does not expect this to affect the chances of additional rate firming happening.