Trapped ILS capital news

What is trapped collateral, or trapped ILS capital? When an insurance-linked securities (ILS) contract is seen to be at-risk of facing losses, sometimes the cedent can call for the collateral (or capital backing the ILS deal) to be trapped or frozen, so it remains available while loss development continues.

The collateral is trapped and unavailable for reinvesting into new ILS contracts, which can create a drag on ILS investment portfolios. The ILS capital can remain trapped for months or years until the ultimate loss associated with the contract is clear and a payout is deemed due or otherwise.

 

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Covid-19 uncertainty could prolong trapping of ILS capital: RenRe

For insurance-linked securities (ILS) contracts and structures that have exposure to potential losses from the Covid-19 corornavirus pandemic, the chances are that their capital and collateral could be trapped for a prolonged duration, executives from RenaissanceRe have suggested.Analysts from Wells Fargo Securities had discussions with reinsurance firm RenaissanceRe's CFO Bob read the full article →

Loss reserve adjustments impact some ILS funds in April

Some insurance-linked securities (ILS) funds continue to be impacted by the catastrophe activity of recent years, as the managers of the ILS funds factor rising ultimate loss figures reported by cedents into loss reserve adjustments for prior year events.While 2017 catastrophe losses are largely stabilised, except for in a few read the full article →

Cat bond activity could surpass expectations in H2 2020: Schultz, Aon Securities

Although the Covid-19 pandemic has undoubtedly stunted primary catastrophe bond issuance, for the most part, deals will get done and it’s possible that activity in the second-half of the year exceeds expectations, according to Paul Schultz, Chief Executive Officer (CEO) of Aon Securities.As part of our series of video interviews read the full article →

Artemis Live: Interview with Cory Anger, GC Securities

This week the newest addition to our Artemis Live series of video interviews with leaders of the insurance-linked securities (ILS) and reinsurance markets features Cory Anger, Managing Director of GC Securities, the specialist ILS and capital markets unit of reinsurance broker Guy Carpenter.All of our Artemis Live video interviews can read the full article →

ILS fund underwriters down pens on Florida renewals

We're told that underwriters from some of the biggest insurance-linked securities (ILS) fund managers have effectively "downed pens" on the Florida reinsurance renewals, in reaction to the pricing and terms on offer.The Florida reinsurance renewals at June 1st 2020 were always going to be contentious.Enough has happened over the last read the full article →

Artemis Live: Interview with Luca Albertini, Leadenhall Capital Partners

The latest in our series of Artemis Live video interviews with leaders of the insurance-linked securities (ILS) and reinsurance markets features Luca Albertini, CEO of London headquartered insurance-linked securities (ILS) and reinsurance related investments manger Leadenhall Capital Partners LLP.All of our Artemis Live video interviews can be accessed directly from read the full article →

Substantial amounts of collateral to be trapped at year-end: RenRe CEO

Renaissance Re, the Bermuda-based reinsurance underwriter and manager of increasing amounts of third-party capital, believes that Covid-19 uncertainty means "substantial amounts of collateral will be trapped" at the end of 2020, the firms CEO Kevin O'Donnell has said.Trapping of collateral has always been expected, given the uncertainty over potential losses read the full article →

Varying pandemic ILS impacts, trapped capital may be held for years: A.M. Best

Rating agency A.M. Best said that varying pandemic related impacts are to be expected for the insurance-linked securities (ILS) market, with the most concerning likely the fact that collateral could be trapped for years given the significant uncertainty over potential losses.There have already been a range of impacts seen in read the full article →

ILS industry still hunting for right balance on protection vs returns: Schultz, Aon Securities

The insurance-linked securities (ILS) and collateralised reinsurance market is still hunting for the right-balance between serving insurance and reinsurance cedents with the protection they need, while dealing with finite term securities, according to Paul Schultz, the CEO of Aon Securities.Speaking with us in a recent Artemis Live video interview, Schultz read the full article →

Artemis Live: Interview with Stephan Ruoff, Schroder Secquaero

For our latest Artemis Live video interview I had a detailed and interesting discussion with Stephan Ruoff, the Deputy Head of insurance-linked securities (ILS) asset manager Schroder Secquaero, a specialist division of global investment group Schroders.All of our Artemis Live video interviews can be accessed directly from our YouTube Channel read the full article →