Third-party reinsurance capital news

Third-party capital in reinsurance, so alternative capital or insurance-linked securities (ILS) market capacity, was more than replenished in 2023, as lost capital was replaced and market growth accelerated to levels beyond expectations at the start of the year, rating agency AM Best has said.

Munich Re has now completed the placement of the second listed tranche of its Eden Re II Ltd. collateralized reinsurance sidecar for 2024, which lifts the reinsurers capital market investor-backed retrocessional protection from the structure to $150 million for this year.

RenaissanceRe’s CEO Kevin O’Donnell believes his firm is well-positioned to continue growing its insurance-linked securities (ILS) offering and doesn’t see the rest of the market as able to disrupt its strategy.

Today, we can reveal the third wave of expert speakers confirmed for our next insurance-linked securities (ILS) conference. ILS NYC 2024 will be held in New York City on February 9th 2024, with hundreds of attendees from the ILS community set to come together for a day of thought-leadership, discussion and valuable networking.

Insurance and reinsurance broking giant Aon has been given an extended time-frame to respond to the complaint filed against it in the New York Supreme Court by fronting specialist Clear Blue Insurance, in relation to the reinsurance letter of credit (LOC) fraud perpetrated by insurtech Vesttoo.

Inflows of capital to certain insurance-linked securities (ILS) managers and structures has helped in moderating retrocession pricing at the January 2024 renewals, resulting in a much less stressed market and better outcomes for some retro buyers.

Stonybrook Capital, a specialist strategic advisory and investment banking firm focused exclusively on the insurance and reinsurance industry, has announced the hiring of Darren Bailey to lead efforts to grow the Stonybrook business internationally and also support the firm’s US domestic business.

Earlier this year, rating agency AM Best and reinsurance broker Guy Carpenter had projected that third-party capital in reinsurance, so alternative capital or insurance-linked securities (ILS) market capacity, would end 2023 at $99 billion, but the market has actually outpaced this forecast.

The two reinsurers established as underwriting vehicles for RenaissanceRe’s Fontana Holdings third-party capitalised casualty and specialty reinsurance focused joint venture have had their capital augmented, rating agency AM Best said also recognising the likelihood of Fontana’s reinsurers delivering profits and positive income in most periods.

Sources of retrocessional reinsurance capital appear in greater supply at this January renewal season than a year ago, which has applied some pressure to rates-on-line at higher, more remote layers, while also shifting more of the balance of power back towards buyers in some cases, we understand.