Insurance Linked Investments

Willis subsidiary, Willis Capital Markets & Advisory (WCMA) feels that the surge of capital that will be looking to enter the reinsurance sector after the next large loss event will strongly favour liquid forms of insurance-linked securities (ILS).

John Whiley, who was previously Head of ILS Administration at Prime Management Limited a division of SS&C GlobeOp, has joined reinsurance linked asset manager Markel CATCo as its new Chief Compliance Officer.

Alternative reinsurance capital, in the form of collateralised products such as catastrophe bonds, industry loss warranties, sidecars and collateralised reinsurance contracts, is growing faster than traditional reinsurer capital and has made an “indelible footprint” in the market, says Standard & Poor’s.

The insurance-linked securities (ILS) market is expected to increasingly look to leverage a rated balance-sheet in the future, and in fact the ILS wave over recent years may only have served to highlight the benefits a rated balance-sheet can offer, according to company CEO’s at an event in Bermuda today.

Alternative reinsurance capital providers continue to expand their remit, reaching and deploying capital ever more deeply into the insurance and risk transfer market and now being seen in the middle market commercial insurance space.

The global capital market has ample capacity to assume the international disaster gap with “relative ease,” and utilising insurance-linked securities (ILS) solutions to address the issue benefits both societies and investors, according to John Seo, Co-Founder and Managing Principal at Fermat Capital Management LLC.

RenaissanceRe (RenRe) has continued to expand its Medici ILS fund offering which now has assets under management of $284 million, while its Upsilon retrocessional reinsurance focused fund continued to shrink in the third-quarter of 2016 as a response to market conditions.

Dedicated catastrophe funds and institutions continue to provide the majority of capacity to the ILS space while hedge funds have also increased their market share in recent times. At the same time, the geographical mix of the investor base in 2016 varies greatly from the previous year, according to Aon Benfield.

Bermuda-based insurance and reinsurance firm Everest Re is “looking forward” to increasing the size of its third-party investor backed collateralized reinsurance vehicle Mt. Logan Re as it seeks to take advantage of ongoing investor interest.

Florida headquartered primary insurance company Universal Insurance Holdings has added an additional layer of protection against catastrophe losses, in the form of a risk-linked contract which appears to be parametric in nature.