Reinsurance sidecars news

Insurance-linked securities (ILS) investors may look more favourably on the catastrophe bond in future, as its relative contract certainty compared to some collateralised reinsurance and retrocession structures means they are less likely to be impacted by unexpected losses from the Covid-19 pandemic.

Despite the impacts of the coronavirus pandemic through recent weeks, Amundi Pioneer Investment Management’s ILS team have been seeing continued demand for the insurance-linked securities (ILS) asset class, in particular from investors that are already experienced ILS allocators.

Arch Capital Group, the Bermuda headquartered insurance and reinsurance specialist underwriter, has released a forecast of its potential first-quarter losses due to the Covid-19 coronavirus pandemic, saying it expects up to $145 million of losses across its property & casualty insurance, reinsurance and mortgage insurance lines of business.

Stone Ridge Asset Management’s mutual insurance-linked securities (ILS) fund assets shrank again in the last quarter of record, with overall net assets down more than 7% in the period to January 31st 2020.

Investors in Oxbridge Re NS Ltd., the fully collateralized reinsurance sidecar vehicle sponsored by Cayman Islands based reinsurance firm Oxbridge Re Ltd., are currently on track to earn a very healthy roughly 40% return for the current underwriting year.

The collateralised reinsurance sidecar leaves a lot to be desired, speakers at a conference discussed recently, with the structure singled out as being cumbersome and inefficient, leading to an opportunity for anyone wanting to innovate and work to improve them.

PGGM, the Dutch pension fund administrator and investment manager that has become the largest single source of assets in the insurance-linked securities (ILS) market, added a private quota share arrangement with reinsurance giant Swiss Re in 2019, using a special purpose insurer (SPI) named Viaduct Re Ltd.

Arch Capital Group, the Bermuda headquartered insurance and reinsurance specialist, has sponsored a new $76.5 million sidecar issuance through the special purpose insurer Voussoir Re Ltd., we understand.

Use of third-party capital has continued to increase at Bermuda headquartered international specialty insurance and reinsurance firm Argo Group, with its net premiums dipping as a result of sharing more of its underwritten risk premiums (and likely losses) with third-party investors.

Having brought together its insurance-linked securities (ILS) and retrocessional reinsurance activities last year, global firm Swiss Re expects to remain a major player in the alternative capital space, its CFO said yesterday.