capital markets

Hannover Re may have recovered as much as $815 million from its retrocessionaires for losses from the major catastrophe events of 2017 and with the capital markets cited as playing a “key role” in its retro arrangements, it stands to reason that investors will have taken a reasonable sized share.

Any hopes that meaningful reinsurance rate increases might have been available in 2018, to help re/insurers and ILS players offset the heavy losses suffered in 2017, have been dashed by another broadly flat reinsurance renewal at April 1st, according to broker Willis Re.

Finance ministers from the Association of Southeast Asian Nations (ASEAN) group of countries are set to discuss disaster resilience and risk transfer at meetings scheduled for next week in Singapore, with the group looking to find ways to bring disaster risk financing up to speed.

Global asset management group Schroders observed a mixed outcome at the January 1st, 2018 renewals, with insurance-linked securities (ILS) business experiencing lower-than-anticipated rate increases across all lines, according to Dirk Lohmann, CEO of Secquaero Advisors AG and Daniel Ineichen, Head of ILS Portfolio Management at Schroders.

It’s M&A season in insurance and reinsurance with seemingly nobody being safe from the searching eyes of an investor or acquirer and things are moving apace, with a number of deals on the table and likely more discussions going on behind closed doors.

The United Kingdom government has been courting China and trying to encourage the country to look towards the UK and its recently enacted insurance-linked securities (ILS) regulatory and tax framework as a vehicle to help China and its entities gain access to greater disaster insurance or reinsurance protection.

Insurance-linked securities (ILS) remain an attractive and diversifying asset class, and with returns now expected to be higher following 2017 catastrophe events and the subsequent impact on reinsurance industry pricing, Mercer’s Robert Howie suggests investors should look to the space in 2018.

IncubEx, the product and service development firm that counts its founder and Chairman as insurance and reinsurance entrepreneur and Brit co-founder Neil Eckert, is in the market raising funds and we’re told that one of the target products the firm is working on is catastrophe risk trading.

The insurance and reinsurance industry loss estimate for Cyclone Debbie has been finalised at AU $1.74 billion by PERILS AG, a 5% on the previous report of the market-wide loss from the storm and now equivalent to roughly US $1.34 billion.

Insurance and reinsurance companies face a conundrum. Driven by their need to modernise, innovate, digitalise and generally shift towards technology driven risk transfer business models, re/insurers are spending increasing amounts of money, causing their expenses and costs to rise as a result.