Industry loss warranties news

According to Artemis’ sources, activity in the industry-loss warranty (ILW) market has increased in the last few weeks, as reinsurance and insurance-linked securities (ILS) markets prepare for what is anticipated to be an active 2024 Atlantic hurricane season.

Jireh Connect, a technology platform that targets helping brokers place risk more efficiently with reinsurance and risk capital providers and manage the process more effectively, has announced the completion of its first placement, an industry loss warranty (ILW).

Despite some tightening of spreads in catastrophe bonds, overall K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, remains overweight the insurance-linked securities (ILS) asset class, although finds industry-loss warranties (ILW’s) relatively less attractive at this time.

Swiss Re secured $50 million of cyber industry-loss warranty (ILW) cover recently in a transaction that the broker involved, Gallagher Re, is hailing as the first cyber retrocession ILW ever traded.

The City National Rochdale Select Strategies Fund, a US mutual insurance-linked securities (ILS) fund focused on investments into industry-loss warranties (ILW’s) and industry-index trigger catastrophe bonds, has continued to grow, to reach almost $218 million as of October 31st 2023.

Sources of retrocessional reinsurance capital appear in greater supply at this January renewal season than a year ago, which has applied some pressure to rates-on-line at higher, more remote layers, while also shifting more of the balance of power back towards buyers in some cases, we understand.

PCS, a unit of Verisk, has announced an expansion of its insurance industry loss index for terrorism risks, with SRCC (Strikes, Riots, Civil Commotions, and Civil Unrest) now being added to the PCS Global Terror Index.

Swiss-headquartered fintech Cerchia has continued to build momentum around its capital markets focused direct risk transfer platform, with a particularly notable cyber trade, that saw a cyber industry-loss warranty (ILW) transacted using a PCS Global Cyber industry-loss index trigger.

For global insurance and reinsurance player Everest Group, using its Mt. Logan Re Ltd. third-party capitalised sidecar-like structure is seen as preferable to sponsoring catastrophe bonds or hedging with ILW’s, according to CFO Mark Kociancic.

K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, has raised its conviction on investing into insurance-linked securities (ILS) and reinsurance investments to “strongly overweight” saying it anticipates firm pricing conditions and despite some spread tightening in catastrophe bonds the yields remain attractive.