Catastrophe bond news

Introduction of a new risk-based capital system in China could increase the chances that insurers and reinsurers from the country elect to utilise catastrophe bonds as a tool which could help them to replenish or boost their capital adequacy.

Entropics Asset Management AB has now had its first ILS fund, the SEF Entropics Cat Bond Fund, approved by the Luxembourg financial supervisory authority, the CSSF, and passported into the Swedish Market allowing it to be officially opened for business.

New York firm Stone Ridge Asset Management, provider of mutual fund strategies in alternative risk exposures including reinsurance and insurance-linked securities (ILS), wants to raise the assets under management of its Interval ILS fund to near $1.5 billion.

Malta, a domicile targeting the insurance-linked securities (ILS), catastrophe bond and reinsurance convergence sector, has now completed its Securitisation Cell Company regulations which bring together the special purpose reinsurer concept with protected cells.

The pricing on American International Group’s (AIG) latest catastrophe bond transaction, Tradewynd Re Ltd. (Series 2014-1), has settled at the mid-point of guidance on one tranche of notes and below it on the other two.

Here are the ten most popular news articles, week ending 7th December 2014, 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.

According to broker pricing sheets, the secondary pricing mark for Florida primary insurer American Strategic Insurance’s Gator Re Ltd. catastrophe bond has declined, as the market absorbs the fact that as much as 75% of the retention beneath the trigger is eroded.

January 1 reinsurance renewal rates are expected to decline -5% to -15%, while terms and conditions are expected to expand further, as alternative reinsurance capital drives secular change across property catastrophe risks and into longer-tailed lines, say analysts.

U.S. residual market insurers, which are often the state-backed non-profit and in extreme cases the insurer of last resort for property coverage, are increasingly relying on catastrophe bonds and the capital markets as sources of reinsurance protection.

The total amount of catastrophe bond issuance in 2014 has now overtaken the 2013 full-year figure for the first time. 2013 issuance reached $7.642 billion, but the 2014 total thanks to the completion of USAA’s latest cat bond yesterday has now hit $7.643 billion.