Insurance Linked Investments

The ability to access the capital markets is key for reinsurers and with Hong Kong eager to establish itself as Asia’s insurance-linked securities (ILS) hub, Peak Re is well positioned to serve as a conduit between investors and Chinese property catastrophe risks.

Everest Re took advantage of market conditions around the January renewals to build a significantly larger book of retrocession business, leveraging its access to alternative reinsurance capital and use of catastrophe bonds to allow it to deploy capital into its Purple pillared retro product.

PGGM, the Dutch pension fund investment manager and the largest investor in the insurance-linked securities (ILS) space, made good on its option to upsize its allocation to Vermeer Reinsurance Ltd., the joint-venture vehicle that is managed by RenaissanceRe, taking Vermeer’s total capitalisation to over $1 billion in 2019.

Fidelis Insurance Holdings Limited, the specialty insurance and reinsurance firm launched by Richard Brindle, has announced a new raise of fresh capital to help it expand its business, with an equity growth round that featured the Abu Dhabi Investment Authority alongside existing shareholders.

Alternative reinsurance capital is not going away after the recent losses it has experienced, in fact “it’s not even retreating to any great extent” according to the Global Head of Broking at Willis Towers Watson.

Bermuda-based reinsurance firm and third-party capital management specialist RenaissanceRe has benefited from significantly higher fee income earned through its various third-party capital management and ILS fund activities in 2019.

Third-party reinsurance capital accounted for within reinsurer Everest Re’s capital stack shrank at January 1st 2020, as assets under management in its Mt. Logan Re collateralized reinsurance sidecar-like vehicle shrank at year-end, while catastrophe bond maturities outweighed its renewals.

The average return of insurance-linked securities (ILS) funds was just 0.92% for full-year 2019, as catastrophe losses and prior-year loss creep dented returns.

Beazley, the specialist Lloyd’s focused insurance and reinsurance underwriter, lifted the amount of premiums written within its third-party capital backed ‘smart tracker’ special purpose arrangement (SPA) syndicate 5623 significantly in 2019.

Bermuda headquartered ILS fund and investment manager ILS Capital Management Ltd. is adjusting the operating model of its reinsurance vehicle Prospero Re Ltd. to add an element of leverage, while retaining the benefits of collateralized coverage.