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While it sometimes feels as if insurance-linked securities (ILS) and reinsurance linked investments are almost mainstream, there is still a way to go before the asset class truly becomes a staple of the major institutional investors of this world, as evidenced in the results of a recent survey by Mercer.

Mercer’s 2018 European Asset Allocation Report surveyed 912 participating institutional pension fund investors across 12 countries, reflecting total assets under management of around €1.1 trillion.

With the report providing a comprehensive review of the European pension fund sector and its allocation strategies, which is of course the main target investor type for much of the ILS sector, you might have thought ILS would be more broadly invested in, but uptake among institutions still has a long way to go.

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ОРИГИНАЛЬНАЯ ПУБЛИКАЦИЯ ЗДЕСЬ

«С начала апреля не было дождя. Это что же получается, два с половиной месяца!» — прикидывают жители Рогачевщины, и сами удивляются таким подсчетам. Беда сейчас на Гродненщине: такой засухи, как в 2018-м, в регионе не было уже 70 лет! И если на огородах спасти урожай пока можно ежедневным щедрым поливом, то для полей небывалая засуха обещает обернуться катастрофой. Да она уже наделала бед!

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Bermuda headquartered insurance and reinsurance firm Arch Capital Group has increased the amount of third-party capital under its management in insurance-linked securities (ILS) related assets by 20% to $600 million in the last year.

As of last August Arch had $500 million of ILS and reinsurance-linked assets under management, so the amount of capital managed has grown by 20% in around less than one year.

Arch continues to make use of its Arch Re underwriting platform to provide third-party investors with access to reinsurance-linked returns and Artemis understands from sources that these efforts are in the process of becoming more formalised, perhaps leading to the establishment of a dedicated unit to expand Arch’s management of ILS capital.

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Bernina Re Ltd. has been established and launched by the Credit Suisse Insurance Linked Strategies Ltd. team as a new reinsurance company, with the goal that Bernina Re should become the flagship reinsurance platform for the Credit Suisse ILS offering.

Bernina Re Ltd. is a Bermuda based Class 3A reinsurance company that has been established to underwrite business on behalf of the Credit Suisse ILS strategies and funds.

The company said that Bernina Re is a “key addition” to the Credit Suisse ILS platform and is already managing more than $2 billion in trading volume for the investment management team that now has over $9 billion of ILS assets under management.

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As the catastrophe bond market looks to expand outside of the natural catastrophe space, terrorism risk has been highlighted as a potential growth avenue for the insurance-linked securities (ILS) sector, but while new perils bring diversification benefits, it’s essential the risk is quantifiable.

Evidenced by the record-breaking level of catastrophe bond and ILS issuance in the first-quarter of 2018, which followed a record volume of full-year issuance in 2017 and the impacts of last year’s catastrophe events, the ILS market remains buoyant and continues to grow.

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The Abu Dhabi Investment Authority (ADIA), a sovereign wealth investment fund owned by the Emirate of Abu Dhabi and tasked with investing funds on behalf of the Government of the Emirate, has been confirmed as investing in a significant chunk of pension risk transfer specialists Pension Insurance Corporation (PIC).

As we wrote Back in April, the Abu Dhabi sovereign wealth fund had been named as an investor showing interest in taking some of private equity specialist J.C. Flowers’ stake in Pension Insurance Corporation (PIC).

This morning that has been confirmed, and the Abu Dhabi Investment Authority (ADIA) said it has reached an agreement to acquire up to a 21.4% stake in Pension Insurance Corporation Group from funds advised by J.C. Flowers & Co., subject to regulatory approval.

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There’s opportunity for insurance-linked securities (ILS) capacity to grow dramatically into other areas, and while investor response to 2017 events shows they clearly remain attracted and committed to the space, increased manager transparency would be welcomed, according to a report from Clear Path Analysis.

Despite the impacts of 2017 catastrophe events, described by some as the first major test for the ILS community, institutional investors have responded positively and are increasing their allocations to the space, suggesting further market expansion.

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It’s crucial the insurance-linked securities (ILS) market learns from the impacts of 2017 catastrophe events, but despite the losses, the outlook for the ILS asset class is stronger than it has been for some years, according to Zurich headquartered insurance and reinsurance linked investment manager, Twelve Capital.

Artemis recently spoke with Sandro Kriesch, Partner, Twelve Capital and Aaron Coates, Executive Director – Sourcing, Twelve Capital, about both the current state of, and outlook for the ILS space following last year’s losses.

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We are now able to confirm that investment bank Credit Suisse is the ultimate beneficiary of the collateralised coverage offered by the recently completed CHF 146 million Operational Re II Ltd. insurance-linked securities (ILS) or catastrophe bond like arrangement that transfers operational risk exposure to the capital markets.

We announced the existence of this second operational risk ILS transaction earlier this week, saying at the time that there was a good chance this was a second arrangement to provide operational risk insurance protection for investment bank Credit Suisse.

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Pierre Michel, the General Manager for Reinsurance and International Operations at Covea Group, recently hailed insurance-linked securities (ILS) as a natural diversifier of its reinsurance capacity, following the firm’s first catastrophe bond issuance.

Covea Group’s €90 million Hexagon Reinsurance DAC (Series 2017-1) transaction launched in December last year, providing the sponsor with multiyear European windstorm protection.

The deal was structured by Willis Towers Watson Securities, a division of insurance and reinsurance broker Willis Towers Watson, which is soon to be integrated into its reinsurance arm, Willis Re.

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