reinsurance

Lloyd’s of London’s recently established insurance-linked securities (ILS) structure, the multi Insurance Special Purpose Vehicle (mISPV) named London Bridge Risk PCC Ltd., is for now limited in its use to quota share reinsurance transactions with a Lloyd’s member, we can report.

For investors looking to access pure, short-tail property catastrophe re/insurance risk, the insurance-linked securities (ILS) fund format is likely the optimal solution, according to Michael Stahel, Partner at LGT ILS Partners.

Global insurance and reinsurance giant Zurich increased its use of and received strong support from reinsurance and retrocessional capital sources in 2020, ceding US $8.6 billion of property and casualty (P&C) premiums to them across the year.

A research study from Oxford University has found that adopting at least four views of risk can make a significant difference to catastrophe insurance underwriting performance, which presumably also applies in the reinsurance and insurance-linked securities (ILS) worlds.

The intensity of extreme cold events such as the recent US winter storms and Arctic deep freeze may become more volatile as the climate changes, Aon has warned, saying that the February loss event will be a record.

France-headquartered global reinsurance firm SCOR has put in place a sidecar-like, quota share retrocession vehicle named Mangrove Insurance PCC Limited through which it transfers some of its longevity risk to third-party investors.

Bermuda’s reinsurance sector was hit by more catastrophe losses than costs from the COVID-19 pandemic in 2020, according to data from Fitch Ratings.

The size of the estimated winter storm insurance and reinsurance market loss from February’s severe Arctic freeze and the issues suffered by energy organisation the Electric Reliability Council of Texas, Inc. (ERCOT) has raised speculation over the chances of subrogation becoming a possibility for carriers.

German reinsurance giant Hannover Re benefited from its retrocessional protections throughout 2020, potentially ceding almost one-third of natural catastrophe losses and 24% of its losses from the COVID-19 pandemic.

As insurance-linked securities (ILS) such as catastrophe bonds demonstrated their relative lack of correlation to broader financial markets again in 2020, the year was another defining one for the market, Swiss Re believes.