Trapped collateral news

Pension Insurance Corporation plc (PIC) announced just now that it intends to try and put together an investor group to challenge retrocessional reinsurance investment manager Markel CATCo’s proposed buyout scheme, saying that it believes it will “drastically undervalue the interests of investors.”

Markel CATCo Investment Management, the in run-off retrocessional reinsurance manager of insurance-linked securities (ILS) funds, is to be the subject of Chapter 15 bankruptcy proceedings, with filings made in the United States that have also disclosed Danish pension fund investor PKA A/S as a major holder.

United States governmental authorities have concluded their investigations into retrocessional reinsurance investment manager Markel CATCo this week, with no action set to be taken.

Having announced this morning that a proposal has been made to investors to speed the running-off and return of capital of the Markel CATCo retrocessional reinsurance investment funds, the half-year report of the manager’s public fund suggests further wildfire subrogation related recoveries are possible.

A new proposal from Markel CATCo Investment Management and Markel Corporation seeks to speed the return of capital from the CATCo retrocessional reinsurance investment funds to investors, while avoiding any complications to the ongoing running-off from legal claims made.

The retrocessional reinsurance investment portfolio constructed by Markel’s CATCo Investment Management is continuing to develop more favourably than had originally been expected, with the firm reporting a reduction of claims in relation to catastrophe events from 2017.

The insurance-linked securities (ILS) market and its fund managers are adapting their strategies following several years of heavy catastrophe losses, with their experiences in dealing with trapped ILS collateral driving them to evolve the way ILS fund side pockets are set and dealt with, Brian Desmond of Horseshoe told Artemis.

To the reinsurance and insurance-linked securities (ILS) market, earthquake risk is one of the biggest peril threats in the world and one that the market can’t be complacent about, according to Paul Wilson, Head of Non-Life Analytics at Securis Investment Partners.

The unexpected nature of Covid-19 related business interruption (BI) losses is troubling for the market, and it could be another two years before the insurance-linked securities (ILS) industry fully understands the impact, according to leading ILS investors.

The impact and subsequent loss creep from typhoon Jebi in Japan in 2018 caught many insurance-linked securities (ILS) investors by surprise, but the eventual deviation from initial vendor model loss estimates doesn’t translate to a fundamental issue with the models themselves, say industry experts.