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Investor appetite for the returns of U.S. hurricane risk exposed reinsurance remains strong in 2019 despite recent year’s of losses, as issuance of 144A catastrophe bonds that carry exposure to named tropical storms has reached nearly $2.2 billion so far this year.

That’s based on some analysis undertaken by Fitch Ratings using data from our catastrophe bond Deal Directory.

Fitch Rating’s analysis only looks at the ten rule 144A catastrophe bonds issued since the start of the year and that feature exposure to U.S. named storm risk as part of their coverage and trigger.

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NB Reinsurance, a Bermuda-based issuer of ILS, has completed an offering of 19,231 non-voting preferred shares on BSX, effective June 3, 2019.

The shares were issued at $1,000.00 per share, to raise $19.2m.

Clarien BSX Services acted as listing sponsor, while Conyers Dill & Pearman served as legal advisor. Horseshoe Group acts as NB Re’s insurance manager.

NB Re, a subsidiary of Neuberger Berman, a US-based asset management company, said ILS provides greater transparency and less counterparty risk than traditional insurance-related strategies.

Alex Conyers, vice president of NB Re, said, “We believe this transaction represents an important milestone with positive implications for the ILS asset class in Bermuda, further cementing its place at the centre of convergence for the insurance and capital markets.”

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Access to insurance-linked securities (ILS) capacity (the capital markets) is a requirement for insurance and reinsurance firms to remain competitive, with the range of strategies for how to bring more efficient capital within an underwriting business expanding fast.

Taking a step back, access to the capital markets has really been an essential feature of all successful insurance and reinsurance firms since the market began.

The ability to tap into sources of institutional quality investor capital has been a hallmark of success for many of the sectors largest players, since as long ago as the early days of Lloyd’s of London.

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CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) is seeking a further expansion of its range of parametric insurance products for the region, with utilities such as energy firms and drought coverage both potential avenues it is exploring.

Speaking at a conference in the Caribbean last week, CCRIF Chief Executive Isaac Anthony explained that CCRIF wants to expand the range of available parametric insurance products to provide coverage to underserved markets.

The steady expansion of the CCRIF risk pool means a requirement for increasing amounts of reinsurance capacity to underpin the risks it assumes, with the insurance-linked securities (ILS) market just one avenue CCRIF can tap for its own protection.

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AXA Climate, the parametric specialist risk transfer unit of global insurance and reinsurance company AXA, has launched Hail Protection, which reportedly is the first-ever parametric coverage designed to help businesses recover after hail storms.

AXA Climate, which was formerly called AXA Global Parametrics until a recent rebranding of the unit, developed the parametric hail insurance product in response to the increasing financial impact businesses are suffering from hail storms.

The company has launched a pilot program in Colorado, USA, where it said the demand for the new parametric product has exceeded its expectations.

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Excellent management of cyclone Fani by the eastern Indian state of Odisha has become a text book example of how to manage natural catastrophes although the government is now faced with the task of post-disaster reconstruction. With low insurance penetration, the question of using capital markets as a means of risk transfer merits attention.

How Do You Save a Million People From a Cyclone? Ask a Poor State in India’ – the headline in the New York Times of 3 May 2019 was very apt.

Indeed, Odisha, a poor eastern coastal state in India, home to about 42m as per 2011 census with an average income of less than $5 a day, was battered by an extremely severe cyclonic storm Fani on 3 May 2019, but Odisha’s management of the event has been hailed as a classic text-book example of how best to manage a natural disaster.

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Poised to reach new heights in the coming months on the back of bumper year’s of catastrophe bond issuance, the insurance-linked securities (ILS) market is at “an exciting inflection point,” says Co-founder and Managing Director of Fermat Capital Management, John Seo.

In spite of the impacts of the catastrophe events that occurred in 2017 and 2018, subsequent losses and issues of trapped collateral, the ILS market has continued to expand in recent times, albeit at a somewhat reduced pace when compared with previous years.

Reports on the overall size of the ILS market at the end of 2018 do vary. However, the general consensus from insurance and reinsurance brokers is that even with the inclusion of trapped collateral, the market grew once again in 2018, and is approaching the $100 billion mark.

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Less than 5 percent of disaster losses are covered by insurance in poorer countries, versus 50 percent in rich nations

Jan Kellett leads and coordinates UNDP’s external engagement on its disaster, climate and energy work. Astrid Zwick is head of the InsuResilience secretariat at Germany’s development agency, GIZ.

In February, the World Meteorological Organization confirmed the past four years as the warmest on record, and to underline the trend, they confirmed the 20 warmest years have all occurred within the last 22 years. These findings, along with those from the 1.5C report produced by the Intergovernmental Panel on Climate Change (IPCC), urging us to take drastic action, must be heeded – and heeded now.

Probably the most startling aspect of the IPCC report is how disproportionately climate change impacts on those already at a socio-economic disadvantage, and less equipped to deal with its effects. They include indigenous peoples and local communities that depend on agriculture and coastal livelihoods.

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Climate change is a factor in the intensity of hurricanes that threaten to strike the east coast of the United States, according to researchers who say that CO2 and greenhouse gases are helping to diminish the wind shear that can act as a barrier to storms.

Wind shear along the U.S. east coast has long been attributed to being a factor that can help to diminish the power of hurricanes as they approach the seaboard, known to disrupt the structure of tropical storms and as a result lower the chances of them making an intense landfall.

The presence or otherwise of wind shear can dictate the direction hurricanes travel in, their ability to organise and intensify, the intensity they can reach, their size and other factors of relevance to insurance, reinsurance and ILS market interests.

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Global asset management group Schroders has announced the hire of a new distribution lead for its private assets unit, with Peter Arnold set to head up the Alternative Sales Unit which includes the firms insurance-linked securities (ILS) strategies.

Arnold, who joins Schroders from Citi Group, is an experienced senior private assets distribution lead, who most recently held the role of Global Head of International Fund Distribution at Citi. Before his time at Citi he worked at JP Morgan, UBS and Societe Generale.

In his recent role at Citi he specialised in private debt, real estate and global infrastructure, working on both the origination and distribution of third-party private assets strategies to global institutional investors.