Reinsurance sidecars news

Insurance payouts from both Japanese domestic and foreign non-life companies for damage to dwellings after the Kumamoto region of Kyushu, Japan earthquakes in April have risen by 46% in a week to $1.65 billion.

Payouts from Japanese domestic and foreign insurance companies for damage to dwellings from the earthquake that struck the Kumamoto region of Kyushu, Japan in April have already passed $1.13 billion and are expected to rise much further.

The Fort McMurray, Canada wildfires continue to burn and have now spread beyond Alberta and into Saskatchewan, and as losses begin to be calculated the wildfires are now being called the largest wildfire insured loss in history.

Bermuda-based reinsurer Everest Re continued to see strong interest in its collateralized reinsurance sidecar vehicle Mt. Logan Re during the first-quarter, underlining increased investor comfort and acceptance of the expanding collateralized reinsurance space, ultimately supporting ILS sector growth.

The Fort McMurray wildfires which devastated the city and area in recent weeks are estimated to have caused an insurance and reinsurance industry loss in the range of US$3.4 billion to US$6.9 billion, according to AIR Worldwide.

Reinsurance is likely to shoulder at least 50% of the industry loss from the Fort McMurray area wildfire in Alberta, Canada, as uncertainty surrounding the overall loss estimate suggests a greater impact to reinsurers and also ILS players.

Risk modelling and analytics specialist RMS has released its estimate for insured property losses from the earthquake that struck the Kumamoto region of Kyushu, Japan in April, putting an estimated range of $800m to $1.2 billion on the event.

Global providers of reinsurance and retrocession capacity could shoulder as much as 70% or more of insurance industry losses from the Fort McMurray area wildfire in Alberta, Canada, as insurers typically only retain low percentages of gross losses, analysts said.

Results from a series of stress tests set by a division of the Bank of England, the Prudential Regulation Authority (PRA), has underlined the importance of diversified reinsurance capital to the 26 largest UK general insurers.

Losses from the recent earthquakes which struck the Kumamoto area of Kyushu, Japan, are expected to be “manageable” for non-life insurers in the country, due to their robust capitalisation and conservative reinsurance arrangements.