capital markets

A new report calls for an expanding use of risk sharing to help the world tackle the climate emergency and highlights the role of the capital markets, as well as instruments such as ILS and catastrophe bonds, in helping to protect lives and livelihoods against loss and damage during a resilient transition to net zero.

The Start Network, an international network of non-governmental humanitarian organisations, is partnering with the Insurance Development Forum (IDF) on the creation of a new financial service for the humanitarian sector, with parametric triggers and risk pooling at its heart.

Private insurance-linked securities (ILS) funds, that invest in collateralised reinsurance and retrocession, were the main destination for loss creep from hurricane Ida in September, as a number had to add to their reserves for the loss event.

On Monday November 1st 2021 at the United Nations (UN) Framework Convention on Climate Change Conference of the Parties (COP26) in Glasgow, United Kingdom, it became clear that this is a moment in time where the insurance, reinsurance and insurance-linked securities (ILS) industries have an opportunity to display climate leadership.

Catastrophe bond and related insurance-linked securities (ILS) new issuance has now reached $17 billion in 2021, setting a new annual record for the total tracked by our Artemis Deal Directory.

The United Kingdom has become the first G20 country to make climate disclosure mandatory for its largest companies, with Task Force on Climate-Related Financial Disclosures (TCFD) aligned reporting set to be required of over 1,300 of the largest UK-registered companies and financial institutions by April 2022.

Radian Group is back in the capital markets in search of more collateralized mortgage reinsurance for its Radian Guaranty subsidiary, with a $484 million target for an Eagle Re 2021-2 Ltd. issuance of mortgage insurance-linked securities (ILS).

Impact Shares, an ESG focused investment operation, is planning the launch and raising capital for a new catastrophe bond and ILS focused exchange traded fund (ETF), named the Climate Risk Reinsurance Corporation.

According to CEO John Neal, Lloyd’s is on the verge of securing the backing of insurance-linked securities (ILS) capital for three of its syndicates, which we understand are the first transactions to utilise its London Bridge Risk PCC special purpose structure.

The global reinsurance sector outlook remains negative, according to S&P Global Ratings, as returns for the sector still fall short and the industry continues to battle against its commoditization, in particular from non-traditional capital.