January 2017/1

The top 10 ILS fund managers have exceeded $50bn in assets under management (AuM) for 2017, as they posted their fastest rate of growth in the past two years in the run-up to the 1 January renewals.

ILS brokers have estimated that cat bond issuance may total up to $8bn for 2017, driven by a large volume of upcoming maturities and the advantageous pricing available to sponsors.

As a New Zealander, I grew up accustomed to watching rugby players crash around the field armed with little more than a bit of strapping on their ears.

PartnerRe established a new retro sidecar, Mercalli Re, at the 1 January renewals, sources told Trading Risk.

QBE was the ultimate sponsor of the recent $187mn Resilience Re club cat bond, according to sources.

Average cat bond spreads finished 2016 trailing 60 to 70 basis points below yields that were available at the same point in 2015, according to data from RMS.

An upcoming payout from the Gator Re cat bond is on track to make tornado losses more costly for ILS investors than the sector's hurricane claims to date.

Returns from a group of cat bond funds tracked by Trading Risk almost doubled last year from their performance in 2015, as softening spreads bolstered values. Higher-risk deals over the past couple of years have also boosted returns available to investors.

JP Morgan has shut down its ILS trading desk after citing concerns over value in the sector, Trading Risk revealed late last month.

New research suggests that in periods of active Atlantic hurricane activity a "buffer zone" surrounds the southern US coastline that helps to curb landfalling storms.

The US Federal Emergency Management Agency (Fema) said it hoped its first $1.04bn flood reinsurance purchase would lay the cornerstone for a multi-year programme.

SunTrust Bank becomes ILS trustee; Arch backs Premia; Floridian M&A; Russian reinsurer; Longevity swaps; Omers and Allied; Aeolus acquisition; Brazil parametric deal; BHSI eyes Japan

Retrocession and US property catastrophe rates moved closer to flattening out at the 1 January renewals.

Casualty reinsurers operating in the US started to push back against historically broad soft-market terms at the January renewals, with most placements renewing flat, sister publication The Insurance Insider reported.

Alternative market reinsurance capital intakes slowed in 2016, but the sector's rate of growth still outpaced the traditional market, brokers estimated in their reports on the 1 January renewals.

Annualised sidecar returns dropped to the low teens towards the end of 2016, as the softening market and catastrophe losses took a toll on performance.

A Memphis-based advisory firm, Gerber Taylor, has registered a new ILS fund of funds, Securities and Exchange Commission (SEC) filings show.