Collateralized reinsurance news

The returns of insurance-linked securities (ILS) funds as a group continue on a record-setting pace through 2023, as the Eurekahedge ILS Advisers Index delivered 0.82% for July, taking the year-to-date to 7.83%.

Investor inflows to the catastrophe bond market have helped to drive non-life alternative reinsurance capital to a new record high of $99 billion, according to the latest data from Gallagher Re.

Porch Group subsidiary Homeowners of America Insurance Company (HOA), a managing general agent (MGA) and insurance carrier hybrid with exposure to the Vesttoo-linked letter of credit (LOC) fraud, has now replaced some 84% or $147 million of reinsurance affected by the issues, but still been placed under temporary regulatory supervision.

The total-return of the catastrophe bond market is now above 14% for the first eight months of 2023, meaning that the cat bond market’s investment performance remains on-track to set new all-time records this year.

As a form of protection, collateralized reinsurance looks like it could be set for a return to favour, as more primary carrier reinsurance buyers cited it as a preferred alternative capital structure, data from a survey by Moody’s Investors Service suggests.

In its objection to the prospect that beleaguered insurtech Vesttoo would be allowed to make termination payments to some of its staff, fronting specialist Clear Blue Insurance Insurance Group revealed that it had paid at at least $23 million in commissions to Vesttoo entities that provided collateral for reinsurance deals.

Markel has now joined the Vesttoo bankruptcy proceedings, seeking remedies after two letters of credit (LOC) totalling $127.75 million in value were found to be fraudulent in collateralized reinsurance transactions it had entered into.

This video of the second session of the day at our recent Artemis ILS Asia 2023 conference, held in Singapore on July 13th 2023, features a fireside chat discussion with Lorenzo Volpi, Deputy CEO and Managing Partner of specialist insurance-linked securities (ILS) investment manager Leadenhall Capital Partners.

Court filings and confirmation from sources have revealed a missing piece of information related to the invalid or fraudulent letter of credit (LOC) issues affecting Vesttoo facilitated collateralized reinsurance deals, with a Hong Kong investor group named Yu Po listed as a target for pre-trial discovery.

After broker Aon’s segregated accounts and transformer company White Rock Insurance (SAC) Ltd. and the joint provisional liquidators of cells of the structure, filed a Chapter 15 to gain greater control of the cells exposed to the Vesttoo fraud issue, the insurtech has now filed to have White Rock and the JPLs held in contempt […]