Transformer (in insurance-linked securities and reinsurance) news

The UK government is targeting the release of a draft regulatory framework for insurance-linked securities (ILS) in autumn 2016, with the aim to have the framework implemented in early 2017 and said that the ILS work remains a government priority.

The impending release of new insurance-linked securities (ILS) legislation by the UK government could help the London insurance and reinsurance market take on a more active role in creating products to support resilience in developing markets, according to the LMG’s CEO.

The UK Treasury continues to target having its insurance-linked securities (ILS) legislation completed and passed by government for the end of this year and the London ILS initiative led by the LMG continues to aim for ILS business to be conducted in London from January 1st 2017.

The California Earthquake Authority (CEA) is set to increase the size of its reinsurance program with an April placement set to take its total risk transfer to $4.5 billion, but ILS investors have not seen a new catastrophe bond as currently they are hard to justify due to the cost.

Hannover Re increased the volume of ILS and collateralised reinsurance business that it acted as a fronting or transformation service provide for in 2015, saying that this activity is expected to deliver a positive and rising contribution to profits in the future.

Bermuda-headquartered insurance-linked securities (ILS) management, servicing, transformation and fronting specialists Horseshoe Group, have announced the appointment of Kathy Garrigan as Senior Vice President and Actuary, Head of Consulting Actuarial Services.

For German reinsurance firm Hannover Re acting as a service provider in the ILS industry, through fronting and transformation of risks, is increasingly becoming a key growth area bringing in incremental revenues and helping the reinsurer to build new relationships.

Robus, the Guernsey based independent insurance manager and owner of the Hexagon PCC which works with ILS managers and investors to facilitate protected cells for collateralized reinsurance deals, has added two new directors to its team.

Catastrophe bonds now contribute more than 20% of the California Earthquake Authority’s risk transfer and reinsurance coverage and there will likely be more to come as the organisation looks to leverage its transformers again in 2015.

Insurance and reinsurance rating agency A.M. Best has now published the final version of its insurance-linked securities (ILS) market focused criteria report titled “Rating Reinsurance/Insurance Transformer Vehicles.”