Third-party reinsurance capital news

It’s too early to say exactly how the current pandemic plays out, but the challenges are expected to provide an interesting test case for the collateralised and insurance-linked securities (ILS) business model, according to Frank Majors, Co-CEO and President of Nephila Holdings, and a Director of Nephila Capital.

With natural catastrophe reinsurance premiums underwritten having jumped at Swiss Re in the last year, the company has continued to make use of insurance-linked securities (ILS) investor appetite to help it prepare its portfolio for the coming hurricane season.

Global reinsurance firm Hannover Re continued to expand its activities in the fronting space, with the volume of limit fronted for insurance-linked securities (ILS) investors and funds increasing by 7% during the year.

The impacts of the Covid-19 coronavirus pandemic will be felt broadly across the global reinsurance marketplace, but in the insurance-linked securities (ILS) market the effects may drive a reduction in available ILS capacity and trapping of collateral, Darren Redhead, CEO of Lancashire Capital Management said today.

The insurance and reinsurance market looks increasingly disciplined and as a result Lancashire Holdings has taken some opportunities to grow in the first-quarter and expects this discipline to persist, driving further improvements in risk pricing, CEO Alex Maloney said today.

Markel Corporation has put some of its own money behind the running-off of its retrocessional reinsurance investment manager Markel CATCo, investing $90 million in one of the CATCo funds in the first-quarter to boost capital available to fund investor redemptions.

Hiscox Group, the specialist insurance or reinsurance underwriter and ILS capital manager, has forecasted rate hardening for the U.S. wholesale insurance and reinsurance markets due to the impacts of the Covid-19 pandemic.

Markel Corporation reported its first-quarter 2020 results yesterday and in its report the company warned of the potential hit to its insurance-linked securities (ILS) operations from the Covid-19 pandemic, which is perhaps partly evidenced in a -4% decline in assets under management at Markel’s flagship ILS fund manager Nephila Capital.

Head of PCS, Tom Johansmeyer, tells Artemis that there’s a real sense across the marketplace that certain large, complex insurance towers are going to be affected by silent pandemic risk.

Velocity Risk Underwriters LLC, the managing general agency (MGA) operation of reinsurance, catastrophe, climate and weather risk-linked investment manager Nephila Capital, is to expand its direct sourcing of homeowners business in the core wind-exposed coastal insurance markets of Florida and Texas.