Collateralized reinsurance news

Giant asset manager BlackRock is aiming to raise more than $2.3 billion for its new environmental, social and governance (ESG) investment fund strategy that includes catastrophe bonds as one of its target asset types.

The board of the Arkansas Teacher Retirement System, a state pension fund that provides retirement solutions to Arkansas education professionals, voted yesterday to redeem an investment in a Nephila Capital managed ILS fund and make a new allocation to one managed by Pillar Capital, on the recommendation of consultant Aon Hewitt.

While the momentum behind rate firming in reinsurance has continued to fade so far this year, the direction of travel has been positive and better margins are ahead for the reinsurance sector, according to Fitch Ratings.

Reinsurance companies that are actively managing third-party capital in insurance-linked securities (ILS) vehicles are some of the best positioned to take advantage of the current favourable underwriting conditions, according to Moody’s Insurance Credit Analyst, Helena Kingsley-Tomkins.

The upward trajectory of rates on line will continue at the January 1st 2022 reinsurance renewals, including European accounts hit by losses this year, according to Sven Althoff, executive board member at Hannover Re.

There is a clear and ongoing ‘flight to quality’ where ILS funds are concerned, according to Dirk Lohmann, Chairman and Flavio Matter, Head of Origination, ILS, at Schroders Capital.

When the market is turning and reinsurance rates move in one direction, or another, it tends to be insurance-linked securities (ILS) investors that move first and fastest, according to Cory Anger, Managing Director at GC Securities.

A new US mutual investment fund with a focus on catastrophe bonds and insurance-linked securities (ILS) is set to launch, with the Ambassador Fund, as it is named, set to continue a trend of bringing ILS investment opportunities to a wider range of investors.

While there have been challenges for ILS investors over recent years related to losses from so-called secondary perils and to aggregate structures, the market is expected to continue attracting capital, even to these more recently loss-affected areas, according to Tim Ronda of Aon’s Reinsurance Solutions.

The insurance-linked securities (ILS) market has “breakout” potential as the sector returns to growth, increasing numbers of new sponsors enter the market, including from outside of insurance and reinsurance, but the real catalysts for future expansion could be climate change and ESG, Fitch Ratings believes.