News and articles about collateralized reinsurance transactions and collateralised reinsurance market trends.
Collateralised reinsurance simply refers to any fully-collateralised reinsurance transaction, be that securitised or not.
Collateralized reinsurance allows ILS funds, hedge funds, pension funds and unrated, third-party capitalised reinsurance vehicles to participate in major reinsurance programs as the contracts they write are fully-collateralised.
The collateral is put up by investors or third-party capital providers to cover in full the potential claims that could arise from the reinsurance contract.
Normally the collateral posted is equal to the full reinsurance contract limit, minus the net premiums charged for the protection.
Collateralised and insurance-linked securities (ILS) backed capacity providers played a key role in the Florida Hurricane Catastrophe Fund’s (FHCF) 2015 purchase of $1 billion of private reinsurance cover, which Artemis has details of today.
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The amount of homes at risk of storm surge along the Gulf and Atlantic coasts has increased to 6.6 million from 2014, while the total reconstruction cost values (RCV) of the properties has remained at an estimated $1.5 trillion, according to CoreLogic.
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Swiss Re recently sponsored the issuance of three series of notes, totaling $190.7m, using its collateralized reinsurance sidecar Sector Re V Ltd., providing the reinsurer with retrocessional and capital support, Artemis can report.
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Investors in the insurance-linked securities (ILS) and catastrophe bond markets deserve to have equal levels of data transparency in transaction submissions, to enable allocation decisions to be made on a level playing field, according to Ben Brookes of RMS.
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The Insurance Council of Australia has confirmed that severe storms that struck parts of the country in April and May have caused over AUD$1.55 billion of insurance industry losses. These storm losses have caused at least two ILS funds to reserve for potential reinsurance claims.
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For the traditional reinsurance market the competition from alternative sources of capital, such as third-party institutional investors and insurance-linked securities (ILS) funds, is a “key risk”, according to EIOPA.
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Catastrophe and hazard risk modelling company JBA Risk Management today launched its first catastrophe risk modelling platform, JCalf 15, featuring multi-peril probabilistic models and is relevant to both reinsurance and ILS users.
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Analysts from Goldman Sachs believe that reinsurance pricing could stabilise by the end of 2016, but warn that this could be at a structurally lower level from where they may not rise much again, even after future losses.
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Floridian insurers are better protected with catastrophe reinsurance than in the early 1990’s pre-hurricane Andrew, thanks to the use of both vertical and sideways protection, according to financial analysis firm Demotech Inc.
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The Kiskadee ILS funds, operated by Hiscox Group’s third-party reinsurance capital and insurance-linked securities unit Kiskadee Investment Managers, took advantage of diversification opportunities at the April renewals to grow its portfolios to over 300 positions.
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