Reinsurance linked investment

A selective approach and a deep understanding of climate-related risks are key to managing insurance-linked securities (ILS) investments, according to a note by François Divet, Head of ILS at AXA Investment Managers.

We’ve learned of another private catastrophe bond transaction brought to market through the Artex Capital Solutions managed Eclipse Re Ltd. vehicle, with a $5 million Eclipse Re Ltd. (Series 2024-8A) now the eighth private or cat bond lite issuance from this structure in 2024 so far.

Here are the ten most popular news articles, week ending November 3rd 2024, 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.

Given there have been some losses to insurance-linked securities (ILS), Jeremy Noble, President of Insurance at Markel, speaking during the company’s earnings call for Q3’24, provided some context in regards to the upside potential for segment income for the firm’s ILS operation, Nephila Capital, in 2025.

Some investors have started to experience benefits from the outperformance of investments in the private reinsurance segment compared to catastrophe bonds, after softening of pricing had been seen in the second quarter, Pascal Koller Partner and Portfolio Manager at LGT ILS Partners Ltd., recently commented.

Nephila Capital’s assets under management (AUM) rose by $400 million in the third-quarter of the year to end September 2024 at $7 billion, while revenues from Nephila’s ILS business reported by its parent Markel are also up, if you exclude a one-off from the prior year.

The overall yield of the catastrophe bond market rose as the market repriced positions in the wake of recent hurricane Milton, but like other market indices and the performance of cat bond funds themselves, the effect of the storm has been quickly overtaken by continued positive market momentum.

The Florida Retirement System Pension Plan, which is administered by the Florida State Board of Administration, increased its allocations to natural catastrophe insurance-linked securities (ILS) in advance of the mid-year 2024 reinsurance renewals, but has adopted a more cautious stance for 1/1 as it assesses whether the hard market is declining.

Bill Dubinsky, CEO of Gallagher Securities, has highlighted that a key challenge for the insurance-linked securities (ILS) market heading into next year will be sustaining the growth momentum seen in 2023 and 2024, given a certain amount of activity this year was deals brought forward that would have otherwise naturally occurred in 2025.

With catastrophe bond market returns remaining elevated, the cat bond market index calculated by Swiss Re Capital Markets rose again in the last week, regaining all of the decline seen from hurricane Milton and more, to now stand 0.25% higher than when that storm hit.