Collateralized reinsurance news

Latin America has some of the world’s lowest insurance penetration levels globally, a core opportunity for re/insurers. But for insurance-linked securities (ILS) and alternative reinsurance capital the road to meaningful inclusion will likely be longer, but it is expected.

The permanence of alternative capital in the global reinsurance sector, underlined by the growing acceptance and understanding of alternative re/insurance structures by traditional re/insurance players, shows the capital is coming of age, according to S&P.

Fully-collateralized structures are, and will continue to be the main catalyst for growth in a convergence market that’s “here to stay” and which plays a vital role in the risk transfer and mitigation process, according to insurance and reinsurance ratings agency A.M. Best.

The three biggest insurance groups in Japan are seeing mounting claims from the recent run of typhoons that hit the country and the resulting torrential rainfall, flooding and landslides. The tally may rise and the numbers are nearing the levels where some reinsurance layers could be hit.

Insurance and reinsurance group Hiscox’s third-party reinsurance capital and insurance-linked securities (ILS) unit Kiskadee Investment Managers, has announced the launch of Cardinal Re Ltd., a new SPI platform, as well as an increase in ILS assets managed.

ILS and collateralised markets are growing their share of U.S. property catastrophe reinsurance programs, at both national and regional level, as the capital markets continues to become an essential component of many insurers risk transfer arrangements, according to Willis Re.

Tokio Millennium Re, the global reinsurance operations of Tokio Marine & Nichido Fire Insurance Co., Ltd., is increasing its focus on ILS business and advancing its partnership with the capital markets, with the launch of a new unit named ‘Capital Solutions’.

Bermuda based insurance-linked securities and collateralized reinsurance investment manager ILS Capital Management has expanded into London, with a new office, added a number of new hires and also joined forces with an MGA focused on weather risk management and insurance products.

The London insurance and reinsurance market needs “true innovation” as it seeks to cement its role at the centre of global re/insurance commerce. Purely repackaging what has been done well elsewhere, or making marginal gains, is not sufficient according to a report from DAC Beachcroft.

Alternative reinsurance capital, in structures ranging from catastrophe bonds and insurance-linked securities (ILS), to sidecars and collateralized reinsurance structures, is increasingly embedded within the market, with re/insurers increasingly relying on it, according to rating agency Moody’s.