Collateralized reinsurance news

The expected capacity shortage in the retrocessional reinsurance market did not materialise to the degree anticipated at the January 2021 renewals, resulting in a market that still firmed considerably, but did not experience the hardening many had been hoping for.

Fermat Capital Management LLC, the Westport, Connecticut headquartered investment fund manager that, has lifted its catastrophe bond and insurance-linked securities (ILS) assets under management to $7.5 billion before the end of 2020.

Issues related to the potential for insurance-linked securities (ILS) collateral to be trapped, because of uncertainty over the COVID-19 pandemic and its potential losses for the insurance and reinsurance industry, have largely been postponed until after the January renewals.

Global risk-adjusted property catastrophe reinsurance rates-on-line rose by an estimated 6% at the January 2021 reinsurance renewals, according to analysis by Howden Broking.

The resilience of the global reinsurance market “shone through” at the January 2021 renewals, which broker Willis Re says were less onerous than feared for ceding companies.

The January 2021 reinsurance renewals are approaching completion and it looks as if third-party and collateralized sources of reinsurance and retrocession capacity have played a key role again, with capital markets sources of funding growing across the marketplace.

A number of insurance-linked securities (ILS) funds invested into collateralised reinsurance positions that are exposed to catastrophe events in Australia have reported negative performance for November on the back of reserving for hail storms and severe weather, we understand.

Premia Holdings, the global run-off and legacy reinsurance specialist underwriter, has become the first run-off player to bring additional capital into its business using a collateralized reinsurance sidecar structure, with the launch of Elevation Re.

Insurance holding company W. R. Berkley Corporation has launched its first foray into third-party reinsurance capital management with the set-up of a Bermuda based special purpose insurer (ILS) named Lifson Re Ltd. that will act as a kind of P&C reinsurance sidecar structure for the company.

New Incorporated Segregated Accounts Companies (ISAC) available under Bermuda law and regulation, will enable insurance-linked securities (ILS) managers, or investors, to operate both underwriting and investment fund activities within a single company structure.