Collateralized reinsurance news

Use of insurance-linked securities (ILS) such as catastrophe bonds increased among Bermuda-based insurance and reinsurance firms  in 2021, according to recent data collected by the Bermuda Monetary Authority (BMA).

With the 1/1 2023 reinsurance renewals fast approaching, investor Amundi US says it is “very constructive” on the insurance-linked securities (ILS) asset class, thanks to the favourable pricing trends.

Global reinsurance giant Munich Re is revisiting its relationship with capital market investors in its collateralized reinsurance sidecar vehicle for 2023, with a first tranche of Eden Re II notes issued, albeit at smaller size than previous years.

The outlook for the end of year reinsurance renewals may not be saved by a cavalry of ILS capital, coming in at the last minute to fill holes in programs this year, but our sources suggest pockets of successful capital raising from investors are being seen, allowing some to capitalise on the 1/1 rate opportunity.

Vantage Risk, the Bermuda headquartered insurance and reinsurance company, has put together close to $1 billion of capital for deployment into property catastrophe reinsurance opportunities around the 1/1 2023 renewals, using its AdVantage collateralized insurer class of company.

The New Zealand Superannuation Fund (NZ Super Fund), one of the government pension investment providers, has once again grown its investments linked to insurance and reinsurance over the past year, with an increase in allocation evident across all of the strategies it invests in.

Ark Insurance Holdings Limited, a property and casualty insurance and reinsurance subsidiary of the White Mountains Insurance Group, Ltd., has succesfully sponsored a $250 million collateralized reinsurance sidecar Outrigger Re Ltd.

The recently enacted legislative reforms to Florida’s property insurance marketplace have the potential to alleviate some of the concerns of the insurance-linked securities (ILS) industry over prolonged trapping of capital, according to AM Best.

Netherlands-based pension investor PGGM had increased the size of its insurance-linked securities (ILS) market investments to roughly US $8.5 billion (EUR 8.2bn) as of the middle of the year, with this growth at a time of overall asset devaluation likely the trigger for its more recent downsizing in the asset class.

Ahead of a difficult renewal period that looks set to be defined by a shortage of retrocessional reinsurance capacity, it’s clear that the alternative capital space needs to evolve, and yet the conditions providing the impetus may also prevent it from doing so.