Collateralized reinsurance news

Although Lancashire Holdings did engage with insurance-linked securities (ILS) investors at the late and complex January 1st, 2023, reinsurance renewals, the specialty re/insurer decided against raising new funds at its third-party capital collateralised reinsurance underwriting arm, Lancashire Capital Management Limited (LCM).

Lancashire Holdings, the specialty insurance and reinsurance group, continued its strong growth trajectory in 2022 with a 35% rise in gross written premiums (GWP), but while the firm’s underwriting performance improved, losses had an impact on its third-party capital management business.

Bermuda-based insurer and reinsurer Everest Re Group’s collateralized reinsurance investment vehicle, Mt. Logan Re, raised funds at the January 1st renewals despite clear dislocation in the insurance-linked securities (ILS) marketplace, and the firm expects further growth over time, according to Jim Williamson, Group Chief Operating Officer (COO) and Head of Reinsurance.

Insurance industry losses from the devastating earthquake that struck Turkey and Syria earlier this week are anticipated to fall around the US $1 billion mark, with reinsurance capital set to bear the majority, Fitch Ratings believes.

Everest Re, the Bermuda-headquartered global insurance and reinsurance firm, has said that it achieved what it sees as an “excellent outcome” from the January renewal season, with property a particular highlight.

French reinsurer SCOR’s asset management company, SCOR Investment Partners, has announced the expansion of one of its core insurance-linked securities (ILS) fund strategies, Atropos, with assets under management (AuM) now exceeding $2 billion.

Independent investment management giant Cambridge Associates LLC is bullish on the outlook for insurance-linked securities (ILS) investing in 2023, believing the higher yields on offer provide a good return opportunity relative to risk. But they caution that investors should review the ILS asset class on a regular basis.

Catastrophe bond, insurance-linked securities (ILS) and reinsurance investment manager Twelve Capital has said that its exposure to the earthquakes in Turkey through private ILS contracts appears “very limited”, with no impact expected to its products.

According to the final year-end data for the Eurekahedge ILS Advisers Index, an equally weighted index that tracks the performance of 26 constituent insurance-linked investment funds, on average, pure catastrophe bond funds performed the best in 2022, while the gap between the top and bottom performing ILS funds was particularly significant.

The devastating magnitude 7.8 earthquake that struck southern Turkey this morning is unlikely to have a noticeable effect on the performance of catastrophe bonds, given Turkish quake risk is only a minor component of some retrocessional deals, Plenum Investments has said.