Covid-19 news

The return of catastrophe bond and insurance-linked securities (ILS) funds appear widely dispersed after the first-half of the year, as ILS Advisers reported a range of -5.1% to as high as +8%.

In June and July we understand that loss creep related factors have continued to affect some insurance-linked securities (ILS) funds, particularly those focused on private collateralised reinsurance deals, as uncertainty persists over potential impacts from the COVID-19 pandemic and prior year catastrophe losses begin to crystalise.

Lancashire Capital Management Limited, the third-party capital collateralised reinsurance underwriting arm of specialty insurance and reinsurance group Lancashire Holdings, has raised capital around the mid-year at a similar level to the prior year.

Global reinsurance giant Munich Re has said that its second-quarter result will be helped by a lower incidence of natural catastrophe losses, which will help it deliver an above consensus estimate roughly EUR 1.1 billion of profit for the period.

The unexpected nature of Covid-19 related business interruption (BI) losses is troubling for the market, and it could be another two years before the insurance-linked securities (ILS) industry fully understands the impact, according to leading ILS investors.

The return of catastrophe bond and insurance-linked securities (ILS) funds as a group was above average in May 2021, at 0.58%, and even if you subtract the extraordinary boost one fund got due to what is expected to have been wildfire subrogation recoveries, the average ILS fund return was still better than the long-term mean.

This morning, global insurance company AXA has shown that business interruption impacts from the COVID-19 pandemic continue to be felt, with the company announcing a EUR 300 million settlement offer for French restaurants.

The insurance-linked securities (ILS) fund market delivered a very slightly below-average 0.24% return for April 2021, as the effects of severe weather events in the United States caused impacts to some aggregate contracts during the period.

As part of the latest Artemis Live webcast, industry experts argued that utilizing technology will be critical in enabling the reinsurance and alternative capital markets, or ILS sector, to help hedge pandemic risk using parametric solutions.

The overall insurance-linked securities (ILS) fund market averaged a 0.22% return for March 2021, which was above average for the month but seemingly impacted by losses booked by a number of collateralized reinsurance and retrocession focused funds.