Retrocession news

Specialty insurance and reinsurance company Fidelis Insurance is back in the catastrophe bond market, seeking $150 million or more in capital markets backed and industry-loss triggered retrocessional reinsurance, with a Herbie Re Ltd. (Series 2024-1) cat bond issuance.

Jireh Connect, a technology platform that targets helping brokers place risk more efficiently with reinsurance and risk capital providers and manage the process more effectively, has announced the completion of its first placement, an industry loss warranty (ILW).

While almost every market observer and industry analyst are expecting reinsurance capital levels to increase in 2024, broker Howden has highlighted that actually securing access to capital will be a key differentiator for market participants, as not everyone is expected to be successful.

Signal Iduna Reinsurance Ltd. (SI Re), the Swiss based reinsurer located in the city of Zug, reported that while the reinsurance renewals at January 2024 saw a functioning market, retrocession continues to be a driver of conditions in Europe, even though there was less friction in the retro market this year.

Re/insurer MS Amlin has again returned to the capital markets to source catastrophe retrocession through a renewed quota share arrangement via reinsurance sidecar vehicle Phoenix 2 Re Pte. Ltd., lifting the coverage available to the company from the sidecar program to almost $87.5 million in the process.

Conduit Re, the Bermuda headquartered global reinsurance company, has continued to grow its underwriting portfolio at the January 2024 renewals, adding 38% in premiums written with a 3% risk-adjusted rate increase, but keeping its PML’s relatively flat thanks to the use of retrocession.

Aeolus Capital Management Ltd., the Bermuda based reinsurance and insurance-linked securities (ILS) investment fund manager, grew its assets under management considerably in time for the key January renewals, lifting the total by more than 40% to reach a new high of $5.5 billion.

The reinsurance market is expected to remain firm, in terms of its pricing, at the next sets of major reinsurance renewals, at April 1st and July 1st 2024, despite some capital being expected to flow in, Moody’s Investors Service has said.

Despite some tightening of spreads in catastrophe bonds, overall K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, remains overweight the insurance-linked securities (ILS) asset class, although finds industry-loss warranties (ILW’s) relatively less attractive at this time.

Analysts at J.P. Morgan say that the insurance-linked securities (ILS) market is returning to health and also point out an interesting fact, that the average return of ILS funds tracked by the Eurekahedge ILS Advisers Insurance Linked Securities Fund Index in 2023 actually beat the sum of returns over the previous 9 years.