Trading Risk February 2019

A large reinsurer is looking at launching an ILS fronting business to fill the gap left by the pending departure from the space of Tokio Millennium Re.

Allianz will participate in Pimco’s new ILS business both as an underwriter and an investor in its ILS funds, a spokesperson said.

Arguably the single biggest challenge to face reinsurers attempting to attract third-party ILS capital is nothing to do with engaging in fundraising, estimating monthly valuations, or any of the operational facets of asset management.

Hopes for significant rate increases are building.

Cat bond prices in the secondary market have begun recovering following a pre-Christmas sell-off, as investors sought to release capital ahead of the renewal, brokers said.

The cat bond market is set to shrink temporarily as 2019 issuance to date has been overshadowed by the $1.85bn of cat bonds maturing in the first quarter of this year.

The loss tally for catastrophe bonds impacted by the 2017 disaster events has now climbed to $1.1bn, according to January pricing sheets.

Nephila quits AIG treaty; Sydney storm among top hail losses; Fema trims reinsurance; Leadenhall backs new insurer; Travelers buys $430mn aggregate; ILS growth; PG&E bankruptcy negative for insurers; $20bn ILS capital trapped: JLT Re

The reinsurer said it had had to pay an increase on its loss-hit aggregate retro cover.

Leveraging data can make risk more transparent for investors, said Ledger’s CEO Samir Shah.

Most investors in Markel Catco are expected to take up an offer to redeem their shares, as the platform further increased its loss reserves for 2017 events and had its value written down to zero by parent company Markel.

Rising claims from the 2017 hurricanes became one of the biggest losses in 2018 as Irma and Harvey claims continued to rise for longer than typical.

A diverse loss year produced steeper wildfire and typhoon losses than initially estimated.

Both Axis and RenaissanceRe significantly lifted fee income from third-party partners in 2018 as increased volumes and reinstatement income drove more business to be transferred to ILS partners.

Reinsurers said they were expecting more pressure on rates in the upcoming April and mid-year renewals during the early part of the fourth-quarter reporting season.

Mitsui Sumitomo Insurance (MSI) now owns 80 percent of Leadenhall Capital Partners after taking over the holding from its international subsidiary MS Amlin.

The Merion Square ILS fund launched by Rewire Securities and Vida Capital will have the flexibility to invest in a wide variety of insurance instruments covering risks ranging from natural catastrophe to mortality to cyber, CEO Stefano Sola said.

People moves in the industry in the past month.