Trapped ILS capital news

The uncertainty that the Covid-19 pandemic has created for the insurance and reinsurance industry serves to further highlight the need for risk transfer data transparency, all the way down the market chain, according to Nephila Capital Co-CEO Frank Majors

Throughout the current crisis, the catastrophe bond marketplace has once again shown its resilience and ability to perform differently to the broader capital markets, according to Cory Anger of GC Securities.

Our latest video interview is with Niklaus Hilti, Chief Executive Officer and Chief Investment Officer of Credit Suisse Insurance Linked Strategies, who kindly joined us to discuss the current status of the ILS investment space and reinsurance market trends.

As well as enhancing their returns thanks to rising pricing, insurance-linked securities (ILS) fund managers are seeking to capitalise on the hardening reinsurance and retrocession market in a number of other ways that could result in their portfolios delivering better returns and becoming less volatile.

Reinsurance pricing is expected to rise strongly at the July 1st 2020 renewals, with retrocession likely to be an area of particular increase, according to Lorenzo Volpi, Head of Business Development at Leadenhall Capital Partners LLP.

During a period of broad financial market dislocation, the catastrophe bond space continues to exhibit resilience, and in the current operating landscape, the attractiveness of the asset class is enhanced, according to Luca Albertini of Leadenhall Capital Partners LLP.

Third Point Re, the Bermuda headquartered, hedge fund backed global reinsurance firm, aims to find opportunity in any dislocation seen across retrocession and ILS markets, as it stands ready to deploy more capacity into catastrophe retro renewals, its CEO told us.

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.

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.

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.