Alternative reinsurance capital

In line with recent commentary from fellow re/insurance market analysts’, Keefe, Bruyette & Woods (KBW) has advised that the stabilisation of property & catastrophe reinsurance rates will persist in 2015, despite any losses that occur.

By utilising the abundance of reinsurance capital alongside advanced technological and analytic capabilities, the sector has an opportunity to create a supply/demand equilibrium, according to several industry experts.

Alternative reinsurance capital is helping to make reinsurance “more efficient and fair” by targeting pricing of peak perils and bringing costs down in regions that have perhaps been inflated, according to Nelson Seo of Fermat Capital.

The amount of capacity provided by special purpose syndicates (SPS) in the Lloyd’s of London insurance and reinsurance market saw no real growth in 2015, as one more SPS took the total number to 14 but only providing somewhere over £500m of capacity.

Here are the ten most popular news articles, week ending 21st June 2015, covering catastrophe bonds, ILS, reinsurance capital and related risk transfer topics. To ensure you never miss a thing subscribe to the weekly Artemis email newsletter updates.

Discussion of alternative capital’s presence in the global insurance and reinsurance sector sparks varied industry opinions, but for XL Catlin CEO Mike McGavick it’s essential that the additional capacity feels at home in the space.

As Fidelis Insurance Holdings, the new hybrid underwriting and investment-oriented insurance and reinsurance firm, builds traction and when the market opportunity is right, the company can be expected to work with third-party capital, according to CEO Richard Brindle.

The involvement of the U.S. government in provision of terrorism insurance, through the Terrorism Risk Insurance Program under TRIA, limits traditional and alternative reinsurance capital’s ability to play a meaningful role, according to the Congressional Budget Office (CBO).

The expansion of terms and conditions (T&C) has been a common feature of the global reinsurance sector as companies look to offset some of the pressures of a softening market, but analysts at Goldman Sachs feel European reinsurers are managing to resist the trend.

The current excess or glut of reinsurance capital, which continues to build while global loss experience remains benign, is expected to ultimately weigh on property and casualty (P&C) insurance share prices, according to rating agency A.M. Best.