January 2016/1

The top 10 ILS funds have grown their assets under management (AuM) by 4 percent from six months earlier and 7 percent from January 2015, according to the latest Trading Risk investor survey.

ILS brokers have estimated that cat bond issuance may total $7.0bn for 2016, lowering their sights from the $7.8bn forecast for 2015 last January.

Reinsurance cycles may come and go but the seasonal swing from the period of Christmas indulgence to January detox resolution is one that will return every year without fail.

The $57mn Resilience Re bond, completed on Willis Capital Markets & Advisory's private bond platform in December, was linked to collateralised reinsurance participation on the California Earthquake Authority (CEA) reinsurance programme, sources told Trading Risk.

XL Catlin bought what sources described as the biggest ever retro programme in the January renewals as the reinsurance buying for XL Re was brought in line with the previous Catlin purchasing strategy.

Two cat bonds at extreme ends of the risk spectrum opened activity for 2016.

2015 concluded as the second strongest year for ILS issuance since the financial crisis with $7.8bn of volumes, according to Trading Risk records.

Gross catastrophe bond yields ended 2015 up almost 10 percent from December 2014, according to RMS data.

Returns from a group of ILS funds tracked by Trading Risk were down by a third last year on 2014, as rates continued to stabilise in the ILS market.

Two ILS fund managers are supporting new Lloyd's syndicate Probitas 1492, which has a focus on writing Latin American business.

Brit and Aspen have confirmed that they expanded their sidecar vehicles in the January renewals.

Bermudian fund manager Aeolus is working with advisers as it considers bringing in new investors in early 2016, sources told Trading Risk.

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The retrocession market registered a significant softening of terms and conditions in the January renewals as specialty lines of business were increasingly covered alongside property catastrophe risk.

Two major European reinsurance buyers purchased more limit at the January renewals, sister publication The Insurance Insider reported.

The industry loss warranty (ILW) market witnessed rate reductions of about 5 percent in the January renewals, Guy Carpenter said in a client report obtained by Trading Risk.

The January reinsurance renewals saw diverging outcomes for the US and non-US markets, as Guy Carpenter's global property catastrophe rate-on-line index fell 8.8 percent from a year earlier.

Sidecar returns remained in the mid-to-high teens on an annualised basis in 2015, although softening was still apparent.