reinsurance

In 2023, the catastrophe bond market became increasingly attractive for sponsors, with the gap between traditional reinsurance and capital market rates narrowing for some perils, according to reinsurance firm Swiss Re’s Capital Markets division.

Munich Re said this morning that while market pressure has increased slightly in reinsurance, the company anticipates positive conditions continuing through the April and July renewals, although at the same time cautioning that pricing must remain adequate to cover severe weather risks.

While total-return and third-party capitalised reinsurance joint-venture ABR Re remains firmly at the centre of Chubb’s reinsurance arrangements, the re/insurer ceded a little less risk premium to ABR Re in 2023, although the carrying-value of the JV increased over the year.

Third-party investor capital under management in reinsurance joint-ventures and insurance-linked securities (ILS) funds managed by RenaissanceRe’s Capital Partners division reached almost $7 billion at the start of 2024, with the firm’s catastrophe bond fund strategy driving the largest share of the last year’s growth.

The Berkshire Hathaway insurance and reinsurance businesses delivered as Warren Buffett had anticipated in 2023 and the result drives home investor attraction to the sector right now, with a stunning performance and $3.5 billion in earnings reported by the property and casualty reinsurance arm.

The collateralized reinsurance capacity provided to US headquartered insurance holding company W. R. Berkley Corporation by its Lifson Re reinsurance sidecar vehicle grew in importance over the last year, but the company has kept its sidecar capital flat at $380 million for 2024.

The original thesis for buying into the insurance-linked securities (ILS) sector with the acquisition of Nephila Capital is now starting to be confirmed for Markel, as the ILS managers’ results improved dramatically and its funds are substantially all above their high-water marks after 2023.

The North Carolina Insurance Underwriting Association (NCIUA) has returned to sponsor another catastrophe bond to source more named storm reinsurance protection, seeking $250 million or more in aggregate cover from a Cape Lookout Re Ltd. (Series 2024-1) transaction.

Even before RenaissanceRe had acquired Validus from AIG, the Bermuda based reinsurer has said that “substantially all” of the AlphaCat Managers insurance-linked fund strategies were subject to redemption requests from the third-party investors backing them.

Australian insurance giant Suncorp believes that global reinsurance markets have stabilised, while explaining that it has raised prices to cope with the higher costs of reinsurance, elevated natural catastrophe and weather claims, as well as inflationary factors.