Trapped collateral news

Enstar, the legacy and run-off reinsurance specialist, has announced completion of its second legacy transaction focused on property insurance-linked securities (ILS), acquiring a Bermuda based Class 3B reinsurer that underwrote business on behalf of third-party investors.

Enstar, the legacy and run-off reinsurance specialist, has developed a flexible finality solution for insurance-linked securities (ILS) investors. With the Forward Exit Option (FOE) already put to work in a recent transaction, Anguel Zaprianov explained to Artemis in an interview that its application potential is broad.

Analysis from Milliman concludes that hurricane Milton will end up a relatively minor catastrophe loss event for the insurance-linked securities (ILS) market, based on an estimate of insurance market losses in the $20 billion to $40 billion range.

Over the last couple of years the amount of capital trapped in collateralized reinsurance, retrocession and other insurance-linked securities (ILS) has declined significantly, which makes for a much larger and more impactful ILS capital market than you might think, AM Best rightly points out.

Legacy and run-off reinsurance specialist Enstar completed the first loss portfolio transfer (LPT) for prior-year insurance-linked securities (ILS) reserves recently, providing an example of the type of trapped ILS capital solution the industry has been looking for and the company highlights this move as an expansion of its run-off portfolio.

Enstar has completed a legacy reinsurance deal for an insurance-linked securities (ILS) portfolio of 2019 and 2020 written business, which it has hailed as the first deal of its kind for a third-party capital platform and looks like the kind of trapped capital solution that many in the ILS market have explored in recent years.

Executives from global reinsurance firm Hannover Re said today that there is no sign of new capital in the reinsurance market aside from through the catastrophe bond sector and some unlocked trapped collateral, and also discussed the Baltimore Bridge collapse saying that retrocession recoveries are anticipated.

The insurance-linked securities (ILS) market needs efficient trapped capital solutions to provide greater certainty and understanding of capital flows and velocity in the space, with the absence of such solutions seen as a potential barrier to reigniting interest in the private and collateralized reinsurance side of the market.

We’ve learned that the hurricane Ian side pocket investment situation has improved considerably for some insurance-linked securities (ILS) fund managers, with a number of key exposures now failing to reach the levels of cedent loss needed to attach coverage in recent weeks.

The “opportunity cost” of having collateral trapped from prior year events is, in the current higher reinsurance rate environment, increasingly in focus among the insurance-linked securities (ILS) fund manager community, Megan Green of PwC Bermuda told us in a recent video interview.