Reinsurance News

Private ILS contracts and collateralised reinsurance arrangements entered into by ILS investment managers mean that ILS fund exposure to frequency events is on the rise, while the range of perils they are exposed to is also increasing.

The severe winter storm and historic blizzard that struck the U.S. east this weekend is expected to be the first weather event of 2016 to result in an economic loss of over $1 billion, and is likely to be a multi-billion dollar event, according to Impact Forecasting.

The retrocessional reinsurance investment focused listed CATCo Reinsurance Opportunities Fund Ltd. achieved a net asset value return of 11.58% in 2015, despite having to set up side-pockets for potential catastrophe events such as the UK flooding and U.S. tornadoes in December

Swiss Re has collaborated with Veolia and The Rockefeller Foundation, revealing a new scheme designed to improve the resilience of cities and their infrastructure in the face of natural catastrophes or weather disasters. A venture that also has the potential to originate new risk for the reinsurance giant.

An innovative new pandemic business interruption insurance product launched by insurance and reinsurance group AXIS, provides a very good example of how pandemic risk transfer could be structured in a manner suitable for the ILS market and its investors.

The latest risk barometer from Allianz, its fifth in the series, reveals that organisations still perceive Business interruption (BI) and supply chain disruption as the main threat to operations, with 51% of respondents citing a fear that natural catastrophes will cause BI losses in 2016.

Winter storm Jonas, the first severe such storm of the year, will strike the U.S. in the coming days, with impacts expected from the mid-South and Ohio Valley to the East Coast. Many metropolitan areas will see heavy snowfalls, high winds and there is the potential for coastal storm tide and surge flooding.

Risks to fundamentals in the non-life insurance and reinsurance sector are “skewed to the downside” according to analysts from Bernstein, but still the stock market has not yet priced in the fact that many companies are destined to deliver lower returns across the cycle in future.

The varied structures and growing maturity of the insurance-linked securities (ILS) market has the potential to unlock new sources of risk, but innovation and a willingness to venture into the unknown is required, according to ISO’s Tom Johansmeyer.

The outbreak of infectious disease poses a very real and serious threat to global financial stability, with a new report claiming that yearly expected losses from potential pandemic risks top $60 billion, underlining the need for greater involvement from the entire risk transfer landscape.