Alternative reinsurance capital

Hybrid fronting specialist MS Transverse has stated that Vesttoo only participates directly on one program with MS Transverse and that this business is fully collateralized with cash.

The insurance and reinsurance industry faces a potential crisis of confidence over some forms of collateral, as the fall-out from the Vesttoo fraudulent, or forged, letter of credit (LOC) claims spread, which might elevate the profile of the fully-collateralised model of reinsurance adopted by the insurance-linked securities (ILS) market.

RenaissanceRe, the Bermuda based reinsurer and third-party ILS capital manager, has announced that Robin Lang is being named as permanent Group Chief Risk Officer, to succeed Ian Branagan in the role.

A new report from Israeli tech media group Calcalist claims that the audit at insurtech Vesttoo has turned up an issue with letters of credit (LOCs) that total a significant sum in collateral held for transactions facilitated by the company.

Vesttoo, the insurtech that has been working to connect capital markets with diverse types of re/insurance risk, has come under scrutiny after claims of fraudulent collateral emerged in an Israeli tech publication yesterday.

One of the key themes to come out of renewals over the last year is a realignment of risk sharing in natural catastrophe risks between the reinsurance market, including ILS funds and alternative capital, and the primary insurers, which positions the reinsurance side to better be able to demonstrate the profit-potential of their businesses this […]

Here are the ten most popular news articles, week ending July 16th 2023, 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 or get our email alerts for every article we publish.

Commentary attributed to Everest Group CEO Juan Andrade helps to drive home the fact that reinsurance and so also many ILS strategies are now sitting higher up the catastrophe risk tower, with larger industry loss events required to meaningfully involve them in paying claims.

The BofA Securities analyst team say they are increasingly constructive on the reinsurance sector, one reason being that alternative capital growth is not being driven by the collateralized side of the ILS market, while catastrophe bonds are seen as a more compatible instrument and complementary to traditional reinsurance.

Insurance-linked securities (ILS) investment management specialist Nephila Capital has written just over $756 million of the $2.98 billion reinsurance placement by Florida Citizens at the renewals in 2023, but Berkshire Hathaway was the largest participant with a huge $1 billion line.