Insurance Linked Investments

Super typhoon Mangkhut has left deadly impacts in its wake across the northern Philippines, Hong Kong and parts of China, with significant damage in all three areas from strong winds, a high storm surge and extreme rainfall.

Fidelis Insurance, the specialty insurance and reinsurance firm launched by Richard Brindle, has announced a restructure into four key pillars, one of which is Partnerships and will focus on the firms catastrophe quota shares, MGA and third-party vehicles.

The leading catastrophe risk modellers have been furnishing their clients with projections for the potential impacts to the industry from hurricane Florence and according to various data sources the mean for wind insured losses appears to sit in the $3 billion to $3.5 billion range.

Rating agency Standard & Poor’s said that it expects that industry losses from hurricane Florence will be manageable, with no significant impacts to insurance and reinsurance interests.

Global catastrophe loss data aggregator, Property Claim Services (PCS), is “excited” at the prospect of its county-level industry loss data for all 50 U.S. states going live in early 2019, an enhancement that could make industry loss triggers more sensitive to losses at a county level.

The valuations of investments in some of the listed and mutual ILS funds have been fluctuating as hurricane Florence approaches the United States, but the latest forecast now suggests the threat has lessened somewhat.

ILS investors will be just as quick to replenish lost capital in the aftermath of major catastrophes, should Hurricane Florence and other losses hit the market in 2018, according to Michael Popkin, managing director and co-leader of JLT Capital Markets.

While it’s still too early to estimate insurance and reinsurance industry losses from hurricane Florence, some insurance-linked securities (ILS) funds have been providing investors with an idea of their potential portfolio exposure, based on scenario loss totals.

The reinsurance cycle will continue, but future peaks and troughs will increasingly be shaped by capital market appetite for insurance risk, thinks Lixin Zeng, chief executive of AlphaCat Managers Ltd.

As the reinsurance industry begins its discussions on the prospects for January 2019 renewals buyers are pushing for rate reductions in lines of business that have been performing, but a fully soft market is not a foregone conclusion.