Reinsurance sidecars news

The insurance-linked securities (ILS) market is seen as at a crossroads in the wake of hurricane Ian, although ILS capacity has still expanded and the catastrophe bond market is seen as the best positioned segment, rating agency AM Best has said.

Having launched a multi-year sidecar structure called Flywheel Re earlier this year, Accelerant now benefits from greater flexibility and the investor backing is supporting its growth, CFO Jay Green explained at the SIFMA ILS event in Miami last week.

W. R. Berkley Corporation, the US headquartered insurance holding company, has secured additional investor commitments for its Lifson Re collateralized reinsurance sidecar vehicle, growing the vehicles capital base to $380 million for 2023.

The retrocession program of global reinsurance giant Munich Re has shrunk slightly for 2023 as the company navigated the challenging market environment, while still securing $513 million of collateralised capacity for its quota share sidecar vehicles.

At the January renewals, global reinsurance firm Hannover Re capitalised on its long-standing relationships with investors to grow its K-Cession quota share sidecar structure to a record size, ultimately helping the company do more to support its ceding clients demand for natural catastrophe capacity.

In order for capital to flow more meaningfully back into insurance-linked securities (ILS), John Dacey, the CFO of global reinsurance firm Swiss Re, said that the industry needs to better address investor concerns over climate change impacts to nat cat risk.

Third-party capital investors allocated to specialty insurance and reinsurance player Brit Ltd’s collateralised reinsurance underwriting vehicle and ILS fund brand Sussex Capital appear to have profited in 2022, as the company delivered positive income to them for the year.

Global reinsurance company Swiss Re grew its collateralized reinsurance sidecar and insurance-linked securities (ILS) fund assets under management by 29% in 2022, lifting the third-party investor total to $2.9 billion.

Artemis has learned that international specialty insurance and reinsurance group Chaucer plc, part of the China Re group of companies, has successfully placed a renewal of its Thopas Re fully-collateralized reinsurance sidecar structure for 2023.

At the end of 2022, the Bermuda Stock Exchange (BSX) was home to more than 89% of the world’s catastrophe peril linked reinsurance securities, which amounted to roughly $34 billion of insurance-linked securities (ILS) risk capital outstanding.