Reinsurance sidecars news

While the retrocession strategies of Europe’s Big Four reinsurance companies may differ, the still relatively new retro option of sponsoring cyber catastrophe bonds may prove to be an area of commonality between them.

Typhoon Shanshan struck Japan’s southern island of Kyushu yesterday and while it is being called one of the strongest storms to hit the country in decades, the ultimate impact to reinsurance markets is expected to be minimal, while catastrophe bonds and other insurance-linked securities (ILS) are expected to be largely or completely unaffected.

The recent and first ever ‘megaquake’ warning issued by authorities in Japan has heightened the perception of the peril’s risk and even though the warning was eventually lifted, it is seen as a factor that could be supportive of reinsurance pricing for that country, by analysts at J.P. Morgan.

Over the first-half of this year, US headquartered insurance holding company W. R. Berkley Corporation ceded fewer premiums to its Lifson Re collateralized reinsurance sidecar, despite the vehicle remaining the same size in capital terms for 2024.

Capacity is increasing across the range of private insurance-linked securities (ILS) products, as fund managers and reinsurers have benefited from new inflows to structures and investors look to access the strong reinsurance market returns that are available, rating agency AM Best has said.

Challenger Life, the Australian life and retirement income underwriter and investor, expanded its insurance-linked investment allocation by around 37% in the last financial year, with it now amounting to roughly US $490 million across catastrophe bonds and a newly added sidecar investment, while life insurance investments shrank slightly to US $61 million.

Global insurance and reinsurance specialist Everest has continued to cede more in the way of premiums to its Mt. Logan Re third-party capital platform in the second-quarter, with the growth accelerating at an ever faster rate year-on-year.

Full-service global law firm Locke Lord has announced the hiring of J.P. Hong, an experienced insurance-linked securities (ILS) lawyer that previously worked at Sidley, seeing the ILS market as a strategic growth area for the company.

For the first-half of 2024, White Mountains has reported that its investment into the Outrigger Re collateralized reinsurance sidecar, that supports its re/insurer subsidiary Ark, generated the company higher pre-tax income, at $18 million.

At Hiscox Group, as the mix of third-party capital adjusts with new inflows into insurance-linked securities (ILS) structures and continued planned outflows as money gets returned to investors, Hiscox CEO Aki Hussain said today that this won’t affect the firm’s underwriting risk appetite.