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Asia will drive the growth of the global insurance market in the years to come. Technological innovation along with solid financing and the right policies will be needed to make sure as many people as possible in the region get the insurance protection they need.

The demand for insurance in Asia in the coming decade will be shaped by rising household income levels of a rapidly expanding middle-class, policy measures to accelerate financial inclusion, and strengthening social protection and government insurance programs.

Governments are also increasingly making businesses, households, and individuals responsible for managing the adverse financial consequences of risks to assets, lives, incomes, and livelihoods.  One can, therefore, expect increased spending on buying protection and an expanding role for the insurance and capital markets to manage contingent liabilities better. The same holds for access to medical care, which will be spurring demand for health insurance.

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Brazil formalises ILS and special purpose reinsurance vehicle rules

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Brazil has now published its awaited rules on insurance-linked securities (ILS) issuance and special purpose reinsurance vehicles, which are due to come into force from January 4th 2021 bringing domestic ILS capabilities to its marketplace.

As we’ve documented previously, the insurance and reinsurance market regulator, the Superintendência de Seguros Privados (Susep), had been seeing feedback on a framework for legislation and a regulatory regime to allow for the issuance of insurance-linked securities (ILS) in Brazil.

As we also previously reported, Brazil’s regulator, Susep, had also called for the local insurance and reinsurance sector to embrace transparency to support these ambitions of enabling ILS to be issued domestically.

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In a webinar hosted by Intelligent Insurer’s Re/insurance Lounge, AkinovA CEO Henri Winand and Kirill Savrassov of Phoenix CRetro explored the possibilities for ILS to expand into new geographies and lines of business.

A significant motive for bringing insurance-linked securities (ILS) to new geographies is diversification of portfolios, according to Henri Winand, founder and chief executive officer of AkinovA.

Speaking in an Intelligent Insurer Re/insurance Lounge webinar titled “New domiciles, new risks, new structures: another evolution for ILS”, he noted that while an attraction of ILS is that it is seen as uncorrelated from the capital markets, it has a disadvantage in that portfolios are largely concentrated in North America, and to some extent in Asia.

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Izmir, Turkey earthquake industry loss estimated at EUR 55m by PERILS

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The earthquake that struck off the coast of Turkey on October 30th and devastated some areas including the Izmir region is estimated to have only cost the insurance and reinsurance industry EUR 55 million, according to an estimate from PERILS AG.

The earthquake cause significant property damage around the Izmir region, downing buildings and damaging hundreds more, while some 114 people have been reported to have died from the quake.

Interestingly, PERILS, the Zurich based provider of insurance and reinsurance market loss information, explains the Izmir earthquake as a magnitude 6.9 event, despite the fact the USGS has reviewed the event as a magnitude 7.0.

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Investing in private markets remains a prevalent strategy for institutional asset owners, and one that has demonstrated resilience even through the duration of the first quarter of this year as the Covid-19 pandemic spread across the globe. This is not to say private markets investment has been without issue, in the early months of the pandemic investing capital proved problematic in part because businesses were under financial pressure, and in part that funds were unable to access financing.

This report brings together UK and Wider Europe based Investment Actuaries, Heads of Insurance Asset Management, Investment Managers, Head of Investments and Senior Specialist. We explore regulatory improvements, investigate the due diligence that investing in private markets requires, dissect the information disadvantage, evaluate diversification as a key benefit, discuss the supply and demand imbalance, and address the increased role of climate positive and infrastructure related investments.

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Catastrophe bond spreads back at their highest since 2012/13

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Artemis’ data on the catastrophe bond market shows that excess spreads, so the return available above expected loss, of new issuance so far in 2020 is now back at levels last seen in 2012/13.

The market for catastrophe bonds and related insurance-linked securities (ILS) has already broken records in 2020, with more set to fall.

Earlier in November, our Deal Directory saw a first record broken as the number of deals issued in 2020 so far surpassed a record previously set in 2018.

Then, just over a week ago, catastrophe bond and related insurance-linked securities (ILS) issuance in 2020 reached a new annual record, exceeding $14 billion for the very first time.

Demonstrated value of ILS during COVID to drive capital to the market: Aon

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The fact insurance-linked securities (ILS) such as catastrophe bonds and other reinsurance-linked assets clearly demonstrated their value during the height of the COVID-19 pandemic financial market volatility, is likely to draw investors to the sector, Aon Securities believes.

The most negative effect of the pandemic on catastrophe bonds was a brief pause in issuance, for around a month at the height of the global lockdowns in late March into April.

Aside from that, the cat bond market came under selling pressure, as investors needed to free up capital from performant assets that hadn’t lost their value at a time when equity and debt markets were in turmoil.

Alphabet (Google) returns for second cat bond to top up quake cover

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Alphabet, Inc., the holding company for tech giant Google and its units, has returned to the catastrophe bond market in very quick succession to add a second $95 million Phoenician Re Ltd. (Series 2020-2) transaction, clearly pleased with the pricing and execution of its first.

Alphabet had only priced its first catastrophe bond issuance, the Phoenician Re Ltd. (Series 2020-1)  transaction in the last week, securing the targeted $237.5 million of California earthquake insurance protection it had sought at targeted pricing.

That first cat bond settles early next week, but we understand that Alphabet and its Google operations are so satisfied with the process of securing insurance coverage from the capital markets through a catastrophe bond that they have come back for more.

FULL ORIGINAL PUBLICATION HERE

Turker Re, a Lloyd’s broker with a significant insurance and reinsurance broking footprint in the Turkish marketplace and surrounding region, has launched a new product offering of a Turkey earthquake industry loss warranty (ILW) as the first under a new Capital Solutions unit.

The broker hopes to create a new market category for insurance, reinsurance and insurance-linked securities (ILS) companies, offering the Turkish earthquake ILW as an effective hedging tool for any companies with property exposure in the region.

Turker Re is aiming to cement a role for itself in helping the Turkey, MENA and Eastern Europe regions access the capital markets and insurance-linked securities (ILS) investors for reinsurance capacity and has launched a Turker Capital Solutions division, to focus on this opportunity.