Retrocession news

Stock exchange listed ILS and collateralized reinsurance investment strategy the Blue Capital Alternative Income Fund, suffered a -2.62% loss in March 2018, as hurricane Irma loss estimates were increased by counterparties, a factor that has negatively affected a number of ILS funds for the month.

The first catastrophe bond in over a decade from Bermudian insurance and reinsurance group Aspen Insurance Holdings Limited looks set to increase in size by 50%, with the Kendall Re Ltd. (Series 2018-1) international multi-peril transaction now likely to secure the company $225 million of collateralized reinsurance protection.

Some reinsurance firms that entered the year with lower overall levels of capital, following the impacts of the major hurricanes and other losses last year, have become ” increasingly dependent on retrocession and alternative capital to maintain gross capacity,” according to rating agency Moody’s.

Bermudian insurance and reinsurance group Aspen Insurance Holdings Limited is back in the catastrophe bond market for the first time in more than a decade, with a $150 million Kendall Re Ltd. (Series 2018-1) international multi-peril transaction.

Insurance-linked securities (ILS) and collateralized reinsurance investment fund manager Blue Capital Management, a subsidiary of Sompo International Holdings Ltd., may seek to raise more funds as it looks to grow its London-listed strategy, the Blue Capital Alternative Income Fund.

Hannover Re may have recovered as much as $815 million from its retrocessionaires for losses from the major catastrophe events of 2017 and with the capital markets cited as playing a “key role” in its retro arrangements, it stands to reason that investors will have taken a reasonable sized share.

Any hopes that meaningful reinsurance rate increases might have been available in 2018, to help re/insurers and ILS players offset the heavy losses suffered in 2017, have been dashed by another broadly flat reinsurance renewal at April 1st, according to broker Willis Re.

The insurance and reinsurance industry loss estimate for Cyclone Debbie has been finalised at AU $1.74 billion by PERILS AG, a 5% on the previous report of the market-wide loss from the storm and now equivalent to roughly US $1.34 billion.

Demand in the expanding and increasingly influential insurance-linked securities (ILS) market remains strong, and as the space grows, capital markets-backed capacity will cover more of the re/insurance industry’s losses from major events, according to Greg Reisner, a Director at international ratings agency, A.M. Best.

Insurance-linked securities (ILS), catastrophe bonds and collateralized reinsurance funds saw divergent performance during the month of February, as a number saw their performance hit as they were required to make adjustments to prior month loss estimates during the period.