Collateralized reinsurance news

Arch Capital Group, the Bermuda headquartered insurance and reinsurance specialist underwriter, has released a forecast of its potential first-quarter losses due to the Covid-19 coronavirus pandemic, saying it expects up to $145 million of losses across its property & casualty insurance, reinsurance and mortgage insurance lines of business.

While the immediate economic and financial market impacts of the Covid-19 coronavirus pandemic have ramifications for investor appetite, there are longer-term reasons that ILS funds could face challenges when it comes to accepting new inflows while the virus remains prevalent.

Bermuda’s latest addition to its insurance-linked securities (ILS) offering is the much discussed Collateralised Insurer classification of company, which Brad Adderley, Partner at law firm Appleby Bermuda, recently explained will enable ILS funds to target a broader range of cedents.

As our sister publication Reinsurance News reported yesterday afternoon, Lloyd’s has asked its members that have been hit by sizeable losses as a result of the Covid-19 coronavirus pandemic to accelerate capital injections with the goal of stabilising the markets capital position.

The insurance-linked securities (ILS) fund management business of Elementum Advisors, LLC is “in good shape” despite the global Covid-19 pandemic, according to its key investor White Mountains.

Peak Reinsurance Company Limited (Peak Re), the Hong Kong headquartered, Fosun backed global reinsurer, aims to become the Asian leader in insurance-linked securities (ILS) with its acquisition of Lutece, while also benefiting from a new foothold in the Bermuda market, CEO Franz Josef Hahn explained to Artemis.

While the average return of insurance-linked securities (ILS), catastrophe bond and reinsurance linked investment funds was 0.3% in February 2020, some cat bond funds became early victims of the coronavirus pandemic and suffered a decline due to the devaluation of the World Bank’s pandemic bonds.

The ongoing legal action to force pandemic business interruption and shutdown claims from the Covid-19 coronavirus outbreak into property or catastrophe insurance and reinsurance programs may be tempered by an appreciation that this would significantly impact the global re/insurance market, A.M. Best believes.

Peak Reinsurance Company Limited (Peak Re), the Hong Kong headquartered global reinsurer that is majority backed by Fosun International, said this morning it has entered into a definitive agreement to acquire Bermuda-based insurance-linked securities (ILS) asset manager Lutece, which it will rename Peak Capital.

The central catastrophe bond investment proposition has held during the extreme financial market volatility created by the coronavirus pandemic, with the ILS asset class positively outperforming other traditional asset classes, according to Twelve Capital.