Insurance Linked Investments

There has been little in the way of assets under management growth at the industry loss warranty (ILW) focused mutual insurance-linked securities (ILS) fund, the City National Rochdale Select Strategies Fund (CNRLX), in the latest quarter.

The entry of the capital markets into reinsurance through the catastrophe bond instrument was a sign of the global capital markets becoming a wholesale risk trading market, according to Michael Millette, Managing Partner of Hudson Structured Capital Management Ltd.

The final $3.3 million chunk of notes from Bermudian reinsurance firm RenaissanceRe’s $140 million Series 2017-1 issuance of notes from its Fibonacci Reinsurance Ltd. sidecar-like vehicle have now had their maturity extended into 2019, as loss development continues.

Insurance-linked securities (ILS) and collateralised reinsurance activity in the island domicile of Guernsey has accelerated in 2018, with more than double the number of ILS structures established in 2018 so far compared to the whole of last year.

The largest independent insurance broker Lockton has hired two new investment banking and technology experts to its recently launched Lockton Capital Markets division, with the goal of connecting insurtech start-ups with the capital markets.

Analysis from the Bermuda Monetary Authority (BMA) shows that Bermuda’s position as the domicile of choice for the issuance of insurance-linked securities (ILS) transactions remains, with the island being home to the large majority of new issuance.

United Insurance Holdings (UPC Insurance) has renewed its Promissum Re collateralized reinsurance facility in 2018 at an unknown size and the firm has deepened a relationship with investors Amundi Pioneer Asset Management who have allocated just under $20 million to the arrangement.

The performance of insurance-linked securities (ILS) funds in August 2018 was hit by a number of factors, leading to an average return for the market of 0.45% for the month, which is below the long-term average.

The investors who have called for the sale of Bermudian reinsurance firm RenaissanceRe have cited the companies “dominant and unique position in third-party capital management” as a key reason to pursue a sale, saying potential buyers would find that attractive.

Lutece Investment Management Ltd., a retrocession and reinsurance focused specialist investment manager, has added another senior hire in Cornell Fox (who was previously at AlphaCat and Validus) who joined the firm in recent weeks in the role of Head of Investor Relations.