Insurance Linked Investments

The announcement that the first French domiciled collateralised reinsurance sidecar vehicle has been successfully structured, capitalised by investors and launched has captured the imagination of some in the insurance-linked securities (ILS) sector.

Insurance-linked securities (ILS) and reinsurance linked investment funds were once again hit by loss creep in February 2019, causing the group to fall to an average return of -0.05% for the month.

Even though large catastrophe losses were under the long-term average for the first-quarter, there is a chance that insurance and reinsurance firms have their Q1 results dented anyway, due to an expectation of higher attritional weather claims, impacts from a number of man-made loss events and ongoing loss creep.

Investments with insurance-linked securities (ILS) managers Credit Suisse Insurance-Linked Strategies, Elementum Advisors and Fermat Capital Management all delivered positive returns in 2018, despite catastrophe events.

Program and fronting service specialist, Spinnaker Insurance Company, expects further organic growth as it continues to scale its operations with the support of the insurance-linked securities (ILS) space, according to General Counsel, Nicholas Scott and Senior Vice President (SVP), Adam Tyburski.

Personal lines property insurance rates in California and Florida have jumped in the first-quarter of 2019, which will partly reflect an expectation among primary insurers that they will need to pay more for their reinsurance cover this year.

Bermudian reinsurance firm RenaissanceRe has extended the maturity of the remaining $23.3 million of insurance-linked securities (ILS) notes from its Fibonacci Re Ltd. vehicle’s 2017 and 2018 issuances, as loss development continues.

Once again the outlook for reinsurance rates at the mid-year renewal season is clouded and dependent on the appetites of underwriters to deploy more capacity.

Hamilton Re, the Bermuda-based reinsurance arm of Hamilton Insurance Group, has successfully completed a renewal of its collateralized reinsurance sidecar vehicle Turing Re, capitalising the special purpose insurance vehicle with another $65 million of third-party capital.

Aurous Risk Partners, a reinsurance focused managing general agency (MGA) that launched in 2018 with a desire to connect risks with the most suitable capital, has secured its first Lloyd’s energy binder that will be backed by capacity from Credit Suisse ILS’ Arcus Syndicate 1856.