Insurance-linked investments

Hudson Structured Capital Management Ltd. (doing its insurance investment business as HSCM Bermuda), the insurance-linked securities (ILS), reinsurance and transportation focused investment manager, has invested in the latest funding round for insurtech start-up Kin Insurance.

The insurance and reinsurance industry has much more to do to promote parametric risk transfer and other alternative risk strategies, as both risk managers and the C-Suite of major corporations lack a clear understanding of its benefits.

Recent analysis on the return drivers of insurance-linked securities (ILS) shows that over a 15-year period, ILS funds have recorded a superior historical performance when compared with other asset classes.

On a net asset value (NAV) basis, the CATCo Reinsurance Opportunities Fund continued to deliver positive NAV returns in July, but at the same time the share price continues to languish, as much as 135% below their net asset value in the case of one class.

The use of advanced technology and data analytics can bring multiple benefits to insurance and reinsurance firms, according to Swiss Re, which we would add holds true also for insurance-linked securities (ILS) players.

Typhoon Jebi’s impacts on the global insurance and reinsurance market is already above the 1-in-40-year loss level, according to estimates from S&P Global Ratings, who also warn that further material developments cannot be ruled out.

The Florida Hurricane Catastrophe Fund (FHCF) has renewed its reinsurance program at a slightly smaller size of $920 million, but with flat pricing and insurance-linked securities (ILS) players taking a slightly larger share in 2019.

Mortgage insurance specialist NMI Holdings, Inc. successfully completed its third and largest insurance-linked securities (ILS) transaction, the $327 million Oaktown Re III Ltd., and CEO Claudia Merkle highlighted how these capital market backed reinsurance transactions insulate it against adverse losses.

Bermuda headquartered insurance and reinsurance firm AXIS Capital Holdings Limited has lifted the amount of third-party capital assets under its management to a new high at $2.1 billion.

The type of growth witnessed in mortgage insurance-linked securities (ILS) transactions in 2018 is most likely to be replaced with a more normalised growth rate, with ILS capacity expected to become an integral part of mortgage insurers’ programmes, according to Capsicum Re’s Stephen Mathews.