Trading Risk December 2017

Brazilian investment bank BTG Pactual has made a return to the reinsurance market by providing capacity to Bermudian ILS start-up Lutece Re, Trading Risk can reveal

Smart beta products seem to be the flavour of the month

Industry analysts have estimated that the ILS market could pick up as much as 15-25 percent of total insured claims from this year's major disaster losses, but looking at disclosures to date suggests the sector is currently assuming its share will fall at the lower end of expectations

Retro market sources said that capacity shortages would not be a factor in the January renewals after ILS managers reloaded lost capital, but that uncertainty over underlying reinsurance repricing was contributing to a stand-off

Some of the ILS platforms run by the major catastrophe reinsurers appear to have taken heavier losses from the third quarter disasters relative to the burden on their parent companies, but there are a variety of reasons why this has proved the case.

This year has set a new record for cat bond issuances, with volumes topping $10bn - and the trend is expected to continue into 2018, Trading Risk sources have said

This year marked the 25th anniversary of Hurricane Andrew, a storm that would cost reinsurers $56bn if it recurred today, according to modelling company AIR Worldwide

Brit has appointed Scott Brock as president of Scion Underwriting Managers, its new specialty (re)insurance platform, which intends to write business on behalf of third party capital providers, as well as Brit and other markets.

AIR Worldwide has slashed its range of loss estimates for Hurricane Maria to $27bn-$48bn, down from an initial $40bn-$85bn range.

Validus Re is seeking to raise $325mn from its first cat bond, an annual aggregate deal called Tailwind Re, Trading Risk understands.

Investment bank Jefferies said there remains a $20bn gap between (re)insurer loss estimates from Q3 catastrophe events and anticipated industry losses, as it predicted loss creep would fuel rate increases in 2018.

This year began with a flurry of cat bond transactions while existing sponsors took advantage of the soft market and expanded their coverage, as 2017 set a new record for cat bond issuance.

The ILS sector continued to see new launches in 2017, as the fallout from hurricanes Harvey, Irma and Maria gave momentum to a number of niche start-ups.

Solvency II continued to drive life deals in 2017 after the EU capital regime came into force last year, while the market dislocation seen in 2016 following an increase in mortality rates finally abated, sources said.

Is the combination of the Harvey, Irma and Maria (HIM) hurricanes a once-in-a-career event for reinsurance underwriters or likely to happen more often?

Twelve in Frankfurt; Credit Suisse vehicles; ILS returns...

A number of ILS managers stand to benefit from so-called "window" industry loss warranty (ILW) covers, which means that their recoveries may rely on limited loss deterioration.

European traders of catastrophe bonds will be required to report transactions under the updated Markets in Financial Instruments Directive (Mifid II), which comes into effect on 3 January

Canadian institutional investors strengthened their ties with the reinsurance sector in Q4, with CPPIB funding a Bermuda-based reinsurance platform for Ascot and CDPQ investing $400mn in Hyperion

Z/Yen has launched a cyber catastrophe ILS research project as part of its two-year programme looking at how mutual distributed ledgers, such as blockchain technology, can be used across a number of fields

A number of outsized third quarter losses at Lloyd's insurers has highlighted the London market's concentrated exposure to the 2017 hurricanes

Several new ILS vehicles are in the works for 2018, marking a resurgence of interest in managing third-party capital from Lloyd's carriers that have been late to the game in setting up such platforms

Leadenhall Capital Partners has hired Hamza Khan and Paul Haig to join its business development team.

The NZ Super Fund has appointed Del Hart as head of external investments and partnerships, replacing Fiona Mackenzie.

GC Securities has hired Robert Bray as assistant vice president for ILS structuring and origination in New York.

Everest Re has added another year to CEO Dominic Addesso's contract, extending it through 2019, without citing a specific reason for the move.

Megan McConnell will step down as active underwriter of Paraline's Lloyd's Syndicate 4242 in March. She was also involved in the syndicate's reinsurance purchasing strategy.

Allianz Global & Corporate Specialty alternative risk veteran Bill Guffey has stepped down, with Paul Schiavone named as his successor as global head of alternative risk transfer.

Guy Carpenter chairman and reinsurance industry heavyweight Britt Newhouse is set to retire at the end of the year, sister publication The Insurance Insider revealed.