Insurance Linked Investments

The reinsurance company of the future is one which has access to both a traditional balance-sheet as well as alternative capital, and is sophisticated enough to recognise when there are sources of capital with a lower-cost than its own, that can be deployed to the benefit of its clients.

Insurance giant Generali Group said in its annual report that while it has historically preferred protection from traditional reinsurance sources, in some cases it has found that insurance-linked securities (ILS) has offered “more competitive terms,” suggesting the insurer may seek to increase its use of ILS going forwards.

Reinsurance firm Transatlantic Re, or TransRe for short, said that it was disappointed with the rate rises experienced at the January 2018 renewals, but noted that should rates rise further throughout 2018 it could deploy more third-party capital, alongside its own capacity.

Essent Guaranty’s first mortgage insurance-linked securities (ILS) transaction Radnor Re 2018-1 Ltd. has increased in size while being marketed to investors and now looks set to secure the company a $424.4 million capital markets backed source of collateralized reinsurance protection.

Hiscox Re & ILS, the reinsurance and third-party capital management unit of global re/insurer Hiscox, has announced that it is to offer a new cyber industry-loss warranty (ILW) product, which will provide aggregate limits based on the use of a PCS industry loss trigger for global cyber underwriting losses.

Bermuda headquartered reinsurance firm PartnerRe benefited significantly from its use of collateralized sources of retrocessional reinsurance in 2017, which jumped from 41% to 63% of the companies overall reinsurance recoverables.

Multi-strategy hedge fund investor Elliott Management Corporation, which acquired a stake in ILS and reinsurance linked investors Aeolus Capital Management Ltd. just over a year ago, has demonstrated its appetite for insurance related investments by buying into a U.S. life insurance group.

German reinsurance firm Hannover Re continued to grow its use of the capital markets as retrocessionaire and also source of fee income, by expanding its insurance-linked securities (ILS) activities during 2017, an area of the business it sees as growing while meeting cost-of-capital.

Global insurance and reinsurance group Markel Corporation has hired Julia Chu from broker Guy Carpenter to take responsibility for its reinsurance buying, as she takes on the newly created role of Chief Global Ceded Reinsurance Officer.

New Paradigm Underwriters, the Florida based parametric specialist managing general agency that sells parametric insurance and reinsurance products, which are at times backed by ILS capital, has announced a new hire, as Evan D. Bull joins the firm as Executive Vice President.