Insurance Linked Investments

Global catastrophe risk modeller, AIR Worldwide, has announced the development of a new probabilistic cyber model that market participants state will reinforce their ability to develop and deliver innovative solutions such as cyber ILWs and insurance-linked securities (ILS) for cyber risk.

In order to close the insurance protection gap the world’s oldest insurance and reinsurance market, Lloyd’s of London, says that capital market investment, channeled through insurance-linked instruments, is going to be a key tool to help achieve this.

Hurricane Willa’s minimum central pressure has now risen as the storm has weakened slightly, which puts Mexico’s World Bank supported IBRD / FONDEN 2017 catastrophe bond in the clear as the storm will now not be sufficiently intense when it enters the parametric box to trigger any payout.

Floridian headquartered primary insurer Universal Insurance Holdings is set to pass around $315 million of its losses from hurricane Michael to its reinsurance panel, which includes a healthy amount of collateralized protection from ILS funds and other providers.

Among the three key stakeholder groups in the insurance-linked securities (ILS) market, cedants (both insurance and reinsurance), ILS fund managers and ILS end-investors, enthusiasm for the asset class as well as the protection it offers hasn’t waned, despite recent loss activity.

Lloyd’s accredited and London headquartered insurance and reinsurance broker Alston Gayler (AG), which has a recognised ILW broking practice, is to be acquired by fellow broker Miller Insurance Services LLP, the London broker majority owned by Willis Towers Watson (WTW).

RKH Reinsurance Brokers (RKH RB), part of the global Hyperion Insurance Group, has hired Dave Saxton from Steadfast Re to its London operations, we have learned, a move which brings additional treaty, ILS and collateralised market broking expertise to the firm.

As the reinsurance industry meets in Baden-Baden this week two factors are seen as key developments, the wave of consolidation and the urge to be bigger to enhance relevance, as well as having control of the value chain, from customer to capital.

The industry loss to insurance and reinsurance interests from hurricane Michael is estimated to be somewhere between $6.8 billion and $10 billion by RMS, with the majority driven by wind damage to residential properties.

Insurance-linked securities (ILS) are well positioned to meet emerging demand from the ECIS region (Western Balkans, Southern Caucasus, Eastern Europe and Central Asia), although certain challenges must be addressed in order to stimulate issuance, according to global catastrophe risk modeller, RMS.