trapped collateral


SBAI highlights need for strong governance in ILS side-pocketing

The Standards Board for Alternative Investments (SBAI) has published a new document that discusses the practice of side-pocketing within the insurance-linked securities (ILS) industry and explains the need for strong governance, transparency and robust disclosure when it comes to reserving for potential losses. The practice of side-pocketing is broadly used in read the full article →

ILS market COVID-19 losses “kicked down the road”, AM Best warns

The fact cedents allowed insurance-linked securities (ILS) capital to be rolled over into reinsurance renewals rather than trapping it for potential losses from the pandemic, for the ILS market "amounts to kicking the can down the road for COVID-19-related losses," according to AM Best. The rating agency warns that this could read the full article →

Trapped collateral concerns overblown at 1/1, but COVID discussions continue

At the recent January 1st 2021 reinsurance renewals, the expectations for significant impairment to some insurance-linked securities (ILS) strategies because of trapped collateral due to exposure to the COVID-19 pandemic proved overblown. As the end of 2020 approached, some were forecasting that a significant amount of insurance-linked securities (ILS) capital could read the full article →

ILS fund managers negotiate improved terms, buffer loss clauses at renewals

The ongoing renegotiation and fine tuning of terms and conditions related to insurance-linked securities (ILS) capital deployment continued at the key January reinsurance renewals, with ILS fund managers gaining some more ground. Terms and conditions had weakened across the reinsurance and ILS market during the prolonged period of softening of market read the full article →

Quota shares & aggregates drive reinsurance cat losses in 2020: Jefferies

Industry losses from catastrophes and severe weather events are estimated to have reached $87.3 billion in 2020 by the Jefferies equity analyst team, but with frequency a significant factor, it's assumed the main source of losses for reinsurance capital was through quota share and aggregate covers. In reviewing 2020, the analyst read the full article →

Some ILS funds continue to set small COVID business interruption reserves

A number of insurance-linked securities (ILS) funds have continued to report small increases in losses and reserves set related to business interruption claims from the Covid-19 pandemic, we understand, which continued to weigh on results over the last two months. Clarity over the extent of business interruption losses that will be read the full article →

CATCo retro fund rises 7% on reduced 2017 wildfire claims (subrogation?)

Some shareholders in the CATCo Reinsurance Opportunities Fund Ltd., Markel CATCo Investment Management’s listed retrocession focused investment fund, have benefited from a reduction in claims related to California's 2017 wildfires, perhaps suggesting a subrogation recovery has made its way through to the portfolio. The in-run off retrocessional reinsurance focused investment fund's read the full article →

Below average December cat losses still have aggregate implications: Jefferies

Global insurance and reinsurance market catastrophe losses came in some 16% below the long-term average, but there could still be implications for aggregate contracts, as frequent smaller events occurred, according to analysts at investment bank Jefferies. December 2020 ended the year with a much lower level of insured catastrophe losses, after read the full article →

Trapped collateral may persist, but new capital is out there: Willis Re execs

Trapped capital is expected to remain and pose an ongoing challenge for some investors and managers from across the insurance-linked securities (ILS) space, according to executives at Willis Re, the reinsurance arm of broker Willis Towers Watson (WTW). With conditions continuing to trend more favourably for reinsurers as the key, January read the full article →

Trapped ILS capital COVID issues largely postponed beyond renewal

Issues related to the potential for insurance-linked securities (ILS) collateral to be trapped, because of uncertainty over the COVID-19 pandemic and its potential losses for the insurance and reinsurance industry, have largely been postponed until after the January renewals. While numerous insurance-linked securities (ILS) fund managers have already prudently reserved against read the full article →