capital markets

The losses suffered by Japanese insurance firms after the extreme rainfall and flooding in July are rising into the billions of dollars, with leading companies having reported their losses recently and claims already paid having surpassed $715 million.

AXIS Capital has announced the hiring and appointment of a new Global Head of Ceded Reinsurance, hiring Anne Kelly from U.S. primary insurer Travelers into the role.

The government of the United Kingdom is continuing to encourage other countries to look towards the UK and its recently enacted insurance-linked securities (ILS) regulatory and tax framework as a potential avenue for ILS and catastrophe bond issuance, with Brazil the latest country to be courted.

Catastrophe bond and insurance-linked securities (ILS) issuance in the first-half of 2018 covered an unprecedented level of Latin America risks, as transactions focused on North America declined by almost half year-on-year, according to Property Claim Services (PCS).

There are a number of new domiciles and jurisdictions for locating and housing insurance-linked securities (ILS) transactions coming into view, but they will all have to go through the thorough testing that is required to ensure their robustness and flexibility, before success can be guaranteed.

Lloyd’s specialist insurance and reinsurance player Beazley’s special purpose arrangement (SPA) syndicate 5623 is set to offer its third-party investor backers access to a broad and diverse range of risks, with the facilities access likely to mean risks in the portfolio that typical ILS funds or strategies do not underwrite.

As capital market investors increasingly look to access the relatively uncorrelated returns of insurance and reinsurance risk, their appetite is driving market expansion further into primary sources of insurance risk, with insurance now becoming a key area of growth for the ILS market.

Nephila Capital, the largest manager of catastrophe and weather insurance and reinsurance linked investment funds, has had its application to transition to operating its own managing agency at Lloyd’s approved by the market Board and has announced a number of hires.

Insurer American International Group (AIG) is likely to continue to acquire increasing amounts of reinsurance protection, as it utilises reinsurance capital as a lever for performance improvements across its book and is already approaching reinsurer markets about new opportunities in the second-half of this year.

One of the ways the insurance-linked securities (ILS) and investments market has expanded in recent months is through backing quota share-type arrangements for a range of ceding companies, with this activity now outpacing collateralized reinsurance sidecars and helping to provide capacity to support ILS asset growth.