Trading Risk October 2019

A slew of new retro vehicles were mooted at the Monte Carlo Rendez-Vous and existing players are keen to expand.

As more ILS managers look into setting up rated platforms, commentary from two of the latest firms considering this move highlights the variety of motivations that are driving the trend.

Experts have forecast that the cat bond market will rebound heading into 2020 following low issuance this year, with a diverse crop of maturities likely to drive more favourable dynamics for sponsors.

The EUR45mn ($49.50mn) Atmos Re I cat bond from Unipol is likely to lose nearly 50 percent due to severe weather events in Italy, according to sources.

The availability of new capital – or the lack thereof – was a hot topic at the Monte Carlo Rendez-Vous.

The RBS pension scheme increased its allocation to insurance in 2018, including catastrophe and life insurance risks, according to its most recent annual report.

The retro market needs to deliver better transparency to attract investors, but a roundtable of senior executives was split on the outlook for the roughly $20bn market.

The number of assignment of benefits claims in Florida increased by 40.9 percent year on year in June before the implementation of the state’s new laws designed to stamp out abuses of the system.

Pacific Gas & Electric Company has inked its $11bn wildfire insurance subrogation claims deal and criticised an alternative plan put forward.

Sidecar renewals have already begun kicking into gear with new potential sponsors and buoyant demand expected.

The lift in ILW pricing seen at mid-year has been unilateral across most products and was a further increase on the 2018 pricing correction following 2017 events, according to Aon.

Aon’s plan to launch an auction platform in time for 1 January 2020 suggests a struggle is underway in the reinsurance space for the position of auction technology market leader.

ILS investors are unlikely to foot much of the bill from Hurricane Dorian due to the market’s low exposure to Caribbean business, according to sources.

Typhoon Faxai losses are unlikely to have a significant impact on the ILS markets, based on current industry estimates.

Ratings agencies remain positive on reinsurers boosting their use of retrocession to grow, despite this year’s capacity crunch in the retro segment.

The ILS market’s shift toward lower-attaching risk in the past decade meant it had much higher exposures to the 2017/18 losses than to the last active hurricane season in 2004/05.

The major continental reinsurers are looking to continue strengthening their US positions in reaction to the 2019 price increases.

People moves in the ILS market: Lodgepine Capital, Halsband, Hyperion, Guy Carpenter and more