Insurance-linked investments

The opportunity to takeout insurance policies from Florida’s Citizens Property Insurance Corporation may return once again, as the insurers portfolio is expanding faster than it expected and it feels some of the book may be attractive.

Despite the fact insurance and reinsurance markets become increasingly sophisticated in their use of technology to reach customers and provide enhanced coverage, in North America, perhaps the most advanced economy in insured terms, the natural catastrophe protection gap actually widened by over 7% in 2019.

Broking giant Aon said that reinsurance companies included in its Aon’s Reinsurance Aggregate won’t cover their cost of capital in 2020, after loss ratios rose on the COVID-19 pandemic.

The alignment inherent in the collateralised reinsurance sidecar vehicles that Swiss Re operates has helped the company to attract fresh ILS capital even during difficult times, the firms CEO Christian Mumenthaler told us.

When it comes to building a portfolio of insurance-linked securities (ILS) and reinsurance linked investments, there is more to quality and return potential than simply following models, according to Chin Liu of Amundi Pioneer.

Fitch Ratings has reviewed a number of outstanding mortgage insurance-linked securities (ILS) deals sponsored by Bermuda-based insurance and reinsurance group Arch Capital Group, noting the substantial increase in mortgage delinquencies due to the Covid-19 pandemic.

Beazley, the specialist Lloyd’s focused insurance and reinsurance underwriting business, has increased its estimate of the cost of Covid-19 claims for its first party business by 100% to $340 million, net of reinsurance, in light of the evolving status of the pandemic crisis.

Specialty insurance and reinsurance player Brit Ltd. is targeting further growth of its insurance-linked securities (ILS) activities, with expansion of the Sussex Capital platform anticipated, according to Chris Denton.

The winding down and running-off of Markel CATCo Investment Management’s retrocession focused investment fund, the CATCo Reinsurance Opportunities Fund Ltd., continues apace, with the manager securing another $68.9 million release from side pockets established for potential loss reserves.

A senior director of the United States Securities and Exchange Commission (SEC) has called for main street, or retail, investors to be given greater access to private market asset classes, to enhance the return profile of their pension portfolios.