Reinsurance News

Insurance-linked securities (ILS) investors need to be active with capital deployed in the ILS market both pre and post-event, so they can support cedants capacity needs and capitalise on potential opportunities, according to Dr. Robert Herde of Munich Re.

Natural catastrophe and severe weather events during the summer months in Australia have now caused over AUD $550 million (USD $415m) of insurance and perhaps reinsurance industry losses, according to the Insurance Council of Australia.

London-based Pension Insurance Corp. (PIC) increased the volume of longevity exposure it reinsured in 2015 to £3.8 billion, supporting the growing trend of specialist pension insurers utilising longevity reinsurance capacity to manage their exposures.

The United States has suffered another week of severe weather which looks set to result in another billion dollar plus toll for the economy and hundreds of millions of dollars of losses for insurance and reinsurance firms, according to Aon Benfield’s Impact Forecasting unit.

Brokers face increasing pressures, with revenue and profitability likely to continue to be impacted due to the softening reinsurance market environment, but one bright spot could be the growing alternative markets according to rating agency Fitch, while another could be technology.

John Elkann, Chairman and CEO of diversified Italian investment holding company EXOR S.p.A has been appointed Chairman of EXOR’s newly acquired reinsurance operation PartnerRe’s Board of Directors. Also Emmanuel Clarke, President of PartnerRe Ltd., has been named President and CEO.

Standard & Poor’s (S&P) has attributed the continued strong performance of global reinsurers in 2015 to the benign catastrophe loss environment and reserve releases, citing that these factors are masking true business conditions, which are to remain challenging and competitive in 2016.

The tragic events in Brussels, Belgium this week, when more than 30 people were killed by terrorist bombings at the city’s airport and metro, are unlikely to result in significant insurance or reinsurance impact, but demonstrate the lack of coverage for the terrorism-related economic exposure.

The insurance and reinsurance industry loss from the flooding that struck the UK in December 2015 and early January 2016 is now estimated at £1.24 billion ($1.75bn) as the estimate for storms Eva – Frank rises 10%, according to PERILS AG.

As more primary insurers utilise a formal risk appetite statement their reinsurance buying habits have evolved, says Willis Re. And with reinsurance becoming a greater priority for many firms there could be an opportunity for insurance-linked securities (ILS) capacity to expand its global footprint.