Insurance linked securities news, ILS news

Insurers operating in the Asia Pacific region need increasing amounts of reinsurance protection following a series of costly catastrophe years and the COVID-19 pandemic, but they should look broadly at both traditional and alternative forms to secure the most efficient protection in the hardening market environment, according to rating agency S&P.

Trapped capital is expected to remain and pose an ongoing challenge for some investors and managers from across the insurance-linked securities (ILS) space, according to executives at Willis Re, the reinsurance arm of broker Willis Towers Watson (WTW).

Global reinsurance capital levels returned to their pre-pandemic high at $625 billion by the end of September 2020, with a slight rise in alternative reinsurance capital recorded during the third-quarter by broker Aon.

The Bermuda Stock Exchange (BSX) has listed almost 100 more insurance-linked securities (ILS) and catastrophe bond tranches during the record-breaking issuance year of 2020, than it did in the prior year.

RenaissanceRe, the Bermuda headquartered global reinsurance company, had lifted the amount of assets managed within its third-party capital, joint venture and managed insurance-linked securities (ILS) fund vehicles to $6.9 billion by October 2020, with these structures now getting close to equalling the reinsurers own capital base.

As expected, the catastrophe bond hard market persisted through the final quarter of 2020, but the year “went out with an ILS whimper” according to consultancy Lane Financial, as insurance-linked security (ILS) rates-on-line went sideways.

Mars Incorporated, the American company which is one of the largest globally active and multinational manufacturers of food products, confectionery and pet food, has said that alternative capital is attractive to the firm as a potential backer for its captive, whole parametric risk transfer is seen as a “fantastic” risk management tool.

Global reinsurance broker Gallagher Re, part of the Gallagher group, successfully brokered $140 million of traditional mortgage reinsurance for Arch Capital during 2020, as part of the firms Bellemeade Re mortgage insurance-linked securities (ILS) program.

Here are the ten most popular news articles, week ending 10th January 2021, covering catastrophe bonds, ILS, reinsurance capital and related risk transfer topics. To ensure you never miss a thing subscribe to the weekly Artemis email newsletter updates or get our email alerts for every article we publish.

A shift towards underwriting more reinsurance business on a quota share basis could matter more for the forward-profits of many large reinsurers in 2021, than the lower-than hoped for rate increases in excess-of-loss treaty pricing, analysts at Barclays said in a report yesterday.