Collateralized reinsurance news

The stand-alone reinsurance business model may be unsustainable in the future and M&A may not be the fix, as pressure from ILS and alternative capital continues to undercut the traditional reinsurer model, according to analysts from Goldman Sachs.

Elementum Advisors, an independent insurance-linked securities (ILS) and reinsurance-linked investment manager, has announced the hire of Adam Maloney to the firm’s marketing and investor relations function.

Fully collateralized reinsurance company Oxbridge Re has reported a good first year’s results thanks to zero losses and a surprisingly good investment return that perhaps hints at the non-traditional, or even hedge fund reinsurer like, nature of its investment strategy.

Mergers & acquisitions in the reinsurance market are set to continue, according to a new report from Fitch Ratings on the reinsurance market. But scale, while sure to help some under-pressure reinsurers, may not always be the answer to the real issues causing structural change.

As the pace of change in the reinsurance market accelerates, there is an expectation that the amount of capital seeking direct access to insurance and reinsurance risks from third-party investors and institutions will more than double to $150 billion by 2020.

German global reinsurance firm Hannover Re has embraced insurance-linked securities (ILS) and collateralized reinsurance in 2014, expanding its cooperation with a select group of ILS fund managers during the year.

As alternative or ILS capital, in the form of sidecars, industry loss warranties, catastrophe bonds and collateralized reinsurance, becomes an increasing part of the reinsurance market’s furniture, attention to contract details is a must, according to law firm Clyde & Co.

The Isle of Man has joined the domicile race to attract insurance-linked securities (ILS) and catastrophe bond business, with the release of its Insurance Special Purpose Vehicles (ISPV) regulatory framework.

Reinsurance broker Aon Benfield’s catastrophe modelling unit Impact Forecasting said that early estimates suggest aggregated economic losses from February’s winter storms in the U.S. will be in the low-digit billions of dollars, while insured losses are likely to exceed $1 billion.

The Olympus Re reinsurance quota share sidecar vehicle is being wound up, a report says. The third-party capital backed collateralized reinsurance vehicle faced serious losses from the 2004/2005 hurricane season and never fully recovered.