ORIGINAL PUBLICATION HERE

Bermuda-headquartered P&C legacy or run-off reinsurance specialist and founder of ILS Investment Management (ILSIM) Armour Group is seeking to put its expertise to work to help ILS funds or investors that have been hit by recent catastrophe losses.

Artemis has learned from our sources that Armour Group is actively looking to assist ILS investment fund managers and end-investors who have been hit by the aggregation of severe catastrophe losses over the last year and a half.

As we explained just this week, the insurance, reinsurance and ILS market has now experienced around $200 billion of industry losses from major catastrophes and man-made disasters in the last 18 months, which has taken its toll on some funds and managers.

Read More

ORIGINAL PUBLICATION HERE

Hong Kong continues to work towards establishing a local market for insurance-linked securities (ILS), with the regulator and government working together to develop the necessary legislation to support ILS vehicle domiciling and transactions, with a target to get it into the 2019-20 legislative session.

In a speech at the Asian Insurance Forum yesterday, Financial Secretary Paul Chan said that Hong Kong continues to see the development of a local ILS market as beneficial.

As we explained more than a month ago, Hong Kong has begun work to create the necessary legislative environment to support insurance-linked securities (ILS) business.

The Special Administrative Region of China sees itself as an ideal location for a conduit between local and regional insurance and reinsurance firms and the capital markets. Read More

ORIGINAL PUBLICATION HERE

Artemis recently spoke with Adam Bornstein, Global Financial Innovation Specialist, International Federation of the Red Cross and Red Crescent, about the use of catastrophe bonds to finance refugee and migration response, a funding gap currently not addressed through normal humanitarian assistance.

As Artemis reportedly recently, international humanitarian movement, the Red Cross, is looking to issue the world’s first pure volcanic risk-focused catastrophe bond.

The discussion with the movement’s Adam Bornstein (who is a speaker at our upcoming New York ILS conference) also revealed that the Red Cross and Red Crescent Movement is exploring a broader use of ILS structures, exploring how the capital markets could assist with financing issues surrounding migration and refugees.

Read More

ORIGINAL PUBLICATION HERE

Pricing for industry-loss warranty (ILW) backed retrocessional reinsurance protection has not shifted significantly since the aggregation of recent catastrophe loss events, with brokers still pitching capacity at the same rates as prior to the wildfires, sources have told us.

Since the California wildfires are now assumed to be a $15 billion plus industry loss and other events such as Japanese typhoon Jebi and hurricane Michael are expected to see their costs escalate, the focus for the renewals has moved to one of expected rate stability (at least) and the potential for price increases.

But so far our sources tell us that industry-loss warranty (ILW) pricing has remained flat through the recent weeks of market disruption (perhaps dislocation) and that there are transactions being marketed at flat levels, while another broker told us that there is flat pricing on some firm quotes for the renewals as well.

Read More

ORIGINAL PUBLICATION HERE

Everyone thought it would take a really significant single loss, or an aggregation of numerous catastrophes that drove significant impacts in a single year, to change the trajectory of pricing. 2017 wasn’t big enough to do it alone. But now that the market has suffered $200 billion of losses, there are rising hopes for positive price movements in 2019.

Our recent global reinsurance market survey found that 40% of our hundreds of respondents believe that the market needed to experience a $200 billion or greater catastrophe loss, or series of loss events aggregating to that amount at least, before any serious change in pricing trajectory would be seen.

The survey, which only included verifiable responses from participants across the insurance, reinsurance and insurance-linked securities (ILS) value chain, revealed what market players thought it might take to meaningfully turn reinsurance pricing.

Read More

ORIGINAL PUBLICATION HERE

OppenheimerFunds, Inc, the asset manager that is in the process of being acquired by investment giant Invesco to create a $1.2 trillion global powerhouse, has grown the catastrophe bond and related insurance-linked security (ILS) assets under management of its flagship cat bond fund.

The Oppenheimer Master Event-Linked Bond Fund, LLC, counted total net assets of just shy of $300 million as of March 31st 2018.

By the end of September 2018 that figure had jumped to $373.2 million, an increase of almost 25% over just six months of this year.

Read More

ORIGINAL PUBLICATION HERE

The returns on aggregate insurance-linked securities (ILS), including catastrophe bonds, are being questioned by some investors, following the significant number of catastrophe loss events that have qualified under some contract terms in the last two years.

Sources said that investors are set to demand a premium for renewing some aggregate ILS arrangements and that the market should expect that any aggregate catastrophe bonds will likely see their pricing increase in 2019.

There is some nervousness among the ILS fund manager and investor base that aggregate catastrophe bond and collateralised reinsurance coverage may have been given away too cheaply in recent years, leading some to call for increases.

Read More

ORIGINAL PUBLICATION HERE

Peak Reinsurance Company Limited (Peak Re), the Hong Kong based global reinsurer that is majority backed by Fosun International, has completed a ground-breaking insurance-linked securities (ILS) transaction, successfully establishing and launching the first Asian reinsurance sidecar deal.

Lion Rock Re Ltd. is a recently established Bermuda special purpose insurance (SPI) vehicle that has been registered to support the transaction.

Read More

ORIGINAL PUBLICATION HERE

A number of trends that are emerging in the wake of the major catastrophe losses of the last two years can be considered as healthy for the insurance-linked securities (ILS) market, according to industry experts.

After the major losses there now comes a bit of a capital crunch, particularly in retrocession markets, but the fact that investors are being more discerning about where they commit capital to and are in less of a rush to pile in after the losses, is seen as a positive for the longer term growth prospects of ILS.

Analysts at Goldman Sachs noted the potential for a pause in the growth of the ILS market and the fact that institutional investors are rethinking their approach to ILS and reinsurance-linked investing, but from our conversations with major pension funds in recent days, this is no bad thing.

Read More

ORIGINAL PUBLICATION HERE

The industry loss warranty (ILW) market is waiting nervously for confirmed estimates of industry losses to emerge for a number of recent catastrophe events around the globe, with certain trigger points on-watch and further ILW losses possible in the coming weeks.

The ILW market, which largely provides retrocessional forms of reinsurance that trigger and payout based on estimates of industry impacts from catastrophes, has faced its share of losses ever since the major hurricanes struck in 2017.

Loss creep from hurricane Irma also delivered a blow to some ILW providers, tipping a few more positions into loss and now the ILW capacity backers are nervously watching a few specific trigger points for further losses in weeks to come.

Read More