Insurance Linked Investments

Retrocessional reinsurance specialist investment manager Markel CATCo has bought back 1 million shares in one of the classes of its stock exchange listed fund.

The Lloyd’s market has put its investigations into the potential use of insurance-linked securities (ILS) to protect its Central Fund on-hold for the moment, according to CFO John Parry.

Collateralized reinsurance quota shares and retrocessional protections that sit in lower layers of cedant’s towers are the most likely source of ILS market losses from hurricane Florence, according to rating agency Fitch.

The insurance-linked securities (ILS) market and alternative reinsurance capital is forecast to take a greater share market of global reinsurance by 2020, suggesting continued expansion for capital market activity in the sector, according to respondents of our first global reinsurance market survey.

Reinsurance rate increases are set to fade in 2019 leading to a broadly stable pricing environment and at the same time alternative capital and insurance-linked securities (ILS) is set to persist, according to rating agency Standard & Poor’s.

Valuations of some of the listed and mutual insurance-linked securities (ILS) fund strategies have stabilised or even begun to recover after hurricane Florence’s impacts proved to be less severe to ILS investments than had initially been anticipated.

Issues surrounding reserving are going to become a selection criteria for ILS fund managers given the significant loss creep in the aftermath of Hurricane Irma, thinks Dirk Lohmann, CEO and co-founder of ILS specialists Secquaero.

The United Nations World Food Programme (WFP) has become the first to offer so-called Replica parametric risk transfer protection to countries, as a way to secure rapid financing for humanitarian disasters, using an insurance product provided by the African Risk Capacity (ARC).

Muted catastrophe reinsurance rate rises and loss creep could mean investors may be more reluctant to reload in the same way should the industry experience further major natural catastrophe losses, thinks Darren Redhead, CEO of Kinesis Capital Management, the third-party capital vehicle operated by Lancashire Holdings.

The insurance-linked securities (ILS) industry and third-party reinsurance capital providers recognised that hurricane Florence would not be a market-changing event and reacted accordingly.