Retrocession news

Stone Ridge Asset Management, the New York based asset manager an alternative risk premia focus, has experienced continued asset under management growth for its mutual insurance-linked securities (ILS) fund strategies, with total AUM rising another 10% in the last quarter to reach $3.9 billion at October 31st 2023.

Inflows of capital to certain insurance-linked securities (ILS) managers and structures has helped in moderating retrocession pricing at the January 2024 renewals, resulting in a much less stressed market and better outcomes for some retro buyers.

Stone Ridge Asset Management, the New York based asset manager with an alternative risk premia focus, made well over $1 billion in reinsurance trading profits over the course of 2023, with record returns delivered to investors by both of its mutual insurance-linked securities (ILS) fund strategies, according to CEO Ross Stevens.

The January 1st 2024 reinsurance renewals saw a more stable market environment thanks to more favourable supply dynamics, but still property catastrophe rates-on-line are estimated to have risen by 3%, according to broking group Howden.

Craig Hupper, an executive from global reinsurance company TransRe who is well-known and liked in the insurance-linked securities (ILS) community, is set to retire from the firm at the end of this year, Artemis has learned.

Property catastrophe reinsurance renewals saw another wide range of outcomes even in a more orderly market, as capacity providers still demanded steep increases for programs that had been loss-affected during the last year, with global property cat rates seen as ranging from flat to up by 30%.

Sources of retrocessional reinsurance capital appear in greater supply at this January renewal season than a year ago, which has applied some pressure to rates-on-line at higher, more remote layers, while also shifting more of the balance of power back towards buyers in some cases, we understand.

Artemis has now learned that global reinsurance firm Swiss Re has successfully priced the market’s first industry-loss triggered cyber catastrophe bond, securing the $50 million of coverage it had originally targeted from the Matterhorn Re Ltd. (Series 2023-1) transaction.

Over the second-half of 2023, the catastrophe bond market has continued in its shift away from providing aggregate cat bond coverage, with the percentage of the outstanding cat bond market that aggregate deals contribute falling below 42% for the first time in years.

Hiscox Group has now successfully secured its first catastrophe bond in over two decades upsized by 25% to provide $125 million in reinsurance cover, while the Ocelot Re Ltd. (Series 2023-1) cat bond notes priced around 10% below the mid-point of initial guidance.