Industry loss warranty news

The Board of the Texas Windstorm Insurance Association (TWIA) has heard details of an industry-loss warranty (ILW) option for the top of its reinsurance tower, as the insurer of last resort considered buying more protection than its 1-in-100 requires for 2023.

The industry loss warranty (ILW) market has softened somewhat, seemingly in-line with the catastrophe bond market, with what were record high ILW rates-on-line now coming in on average roughly 12% lower for the second-quarter of 2022, according to our sources.

K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, is bullish on the outlook for the catastrophe bond market in 2023, but longer-term believes investor needs must continue to be met.

Neville Ching, the former retrocession managing partner at brokerage Capsicum Re, has formally launched ReFlex Solutions Ltd, an independent reinsurance brokerage headquartered in Bermuda with a mission to bring distribution efficiencies and efficient capital to market.

Swiss-headquartered fintech Cerchia is making progress as it looks to raise around US $200 million from investors and lenders for deployment to a new ILW structure that it believes can help reduce the risk of trapped capital.

Reinsurance broker Gallagher Re has appointed industry-loss warranty (ILW) and retrocession broker Alex McManus to lead its index-based capabilities in Bermuda.

With the key January reinsurance renewals having been challenging and characterised by reduced capacity and higher pricing, the focus can often turn to buying hedges such as industry-loss warranties (ILW’s), but a new study highlights some issues investors should be aware of.

K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, has become even more constructive on the insurance-linked securities (ILS) asset class, seeing near record high catastrophe bond spreads, as well as improved conditions in private ILS, retrocession and industry loss warranties (ILW’s).

As the catastrophe bond market continues to deal with the effects of the 2022 Atlantic hurricane season, Tom Johansmeyer, Head of PCS, Verisk Insurance Solutions, expects demand for industry loss triggers to persist for some time.

The January 2023 treaty reinsurance renewals are running far behind their usual schedule, with only around 5% of the treaty market reportedly having cleared so far, and rate increase indications seemingly rising, analysts at KBW found after a trip to meet with re/insurance executives in Bermuda.