capital markets

SCOR, the French global reinsurance giant, has reorganised its SCOR Global P&C division and added a new unit named P&C Partners which will have a remit including third-party capital and retrocession activities, as well as alternative solutions, InsurTech investing and other partnerships.

Alternative capital vehicles operated by traditional reinsurance firms are increasingly an area of competitive advantage for the sector, according to rating agency Moody’s Investors Service, something that may accelerate the shift towards re/insurer managed ILS assets.

Rating agency Fitch Ratings has changed its outlook for the global reinsurance sector from negative to stable, in a move that might surprise many given the continued influence of market forces on reinsurers ability to generate returns.

The average return for insurance-linked securities (ILS) funds was 0.57% in July 2018, which is close to the long-term average for the month of 0.59% and was helped by little in the way of impacts for the market from catastrophes and weather events in July, as well as less negative development on 2017 loss events.

Aside from the very largest of global reinsurance firms, the rest of the pack need to understand that they need to do more than just provide reinsurance capacity, as that can be more simply and less expensively delivered through the capital markets, according to S&P.

The new normal in reinsurance markets has won out, as pricing optimism following last years major catastrophe losses fizzles out, while the march and influence of alternative capital continues to impact reinsurers ability to earn back their losses.

It appears the remit of Mt. Logan Re Ltd., the collateralized reinsurance, sidecar-like investment vehicle of Everest Re, has expanded in recent months, with the structure entering into a retroactive casualty reserve reinsurance transaction with its parent, signalling a broadening of the Mt. Logan Re underwriting appetite.

The acquisition of Nephila Capital by Markel Corporation that was announced last Friday will give the re/insurer a “predominant role in the ILS market” and bring “strategic benefits” according to the main rating agencies.

Nephila Capital, the world’s largest investment manager specialising in catastrophe and weather insurance-linked securities (ILS) and reinsurance linked assets, is to be 100% acquired by Markel Corporation in a move that is certain to create waves in the marketplace.

Expansion of the insurance-linked securities (ILS) and catastrophe bond market beyond the traditional property catastrophe exposures holds both “promise & peril” for market participants, according to brokerage Willis Towers Watson.