aggregate

One of the interesting trends seen in the catastrophe bond market through recent years and a clear reaction to loss activity experienced, is the shift away from aggregate cat bond coverage, back towards per-occurrence structures becoming the more dominant form seen.

In the global retrocessional reinsurance market, the availability of aggregate covers had been shrinking for some time, but at the January 2023 renewals aggregate retro capacity supply shrank further, while the terms of protection continued to become more restrictive, broker Gallagher Re has said.

Australian primary insurance giant Insurance Australia Group (IAG) has renewed its aggregate catastrophe reinsurance protection at a higher attachment point and extended the term of its quota share with Munich Re.

At this still early stage following the tornadoes and severe storms that struck the United States this weekend, it’s not yet possible to rule out any loss impacts to ILS investors, according to Twelve Capital.

The weekend’s significant tornado activity in the United States could affect some aggregate catastrophe bonds, according to insurance-linked securities (ILS) asset manager Plenum Investments.

Insurance-linked securities (ILS) funds may play a bigger role in providing aggregate reinsurance and retrocession protection in future, as an increasing number of traditional reinsurers are shying away from this, analysts at KBW believe.

Catastrophe risk modeller RMS has now weighed in with its estimate of insurance and reinsurance industry losses likely to come from recent hurricane Zeta’s impacts to the United States and it’s a little higher than other modeller estimates.

Catastrophe risk modeller AIR Worldwide estimates that hurricane Zeta’s onshore wind and storm surge insured losses in the United States will be less than $3.5 billion, with the bottom-end of its range far lower at $1.5 billion.

Hurricane Zeta’s wind and storm surge impacts on Mexico and the United States are expected to cost the insurance and reinsurance market close to $4.4 billion, according to an early estimate from Karen Clark & Company.

Impacts and in particular wind damage from hurricane Zeta have spread far inland across the United States, bringing back memories of Isaias earlier this year.