Trading Risk December 2019

The main disrupted segments are still aggregate retro and sidecar vehicles, where negotiations over the level of trapped capital have held up the renewal process.

This year has arguably been the peak stress point for the ILS industry in the 2017-2019 post-Hurricane Irma years, despite the fact it has been the lightest of the three years for catastrophe losses.

The 2010s are about to end and over the past decade the ILS market has gone through an adolescent growth spurt – heading into 2020 as a far bigger and more complex entity than it was.

Australian investors were among the ILS pioneers and some speculate that consolidation of Australian pensions into mega funds could help grow the industry’s local presence further.

Issuance has picked up in the third quarter of the year with a number of large sponsors including Everest Re and Axa XL entering the market in the fourth quarter.

Sources are expecting some $5bn-trigger second-event covers to pay out as a result of the Typhoon.

Start-up activity in the market has slowed down.

RenaissanceRe CEO Kevin O’Donnell estimated the market took $12bn of losses and brought in $20bn of new capital in 2017.

Overall reinsurance capacity is becoming harder to source for InsurTechs.

The settlements must be approved by California’s governor as well as court judges to enable the utility to exit.

There is a growing confidence that the storm will remain below the $10bn.

Swiss Re ceded an additional $900mn of risk to the alternative reinsurance market in 2019.

Cat specialists RenaissanceRe and Everest Re took the highest proportional hit to equity from the Q3 disaster losses, which resulted in an average cost equivalent to 1.7 percent of shareholders’ equity.

Lead insurers on Aon’s flagship $300mn broking facility have renewed their participation with a reduction in fees, according to sister publication The Insurance Insider.

Amid an uncertain year for the life insurance segment, mortality and value-in-force transactions remained the mainstay of life ILS managers as fundraising tapered off after a 2018 growth spurt.

Most people describing the ILS manager world might break the peer group into three broad categories: reinsurer-affiliated platforms, independent owner-operated firms and asset manager-backed vehicles. Does the market need another category?

Brit has confirmed further details of the structure of its new Lloyd’s specialty fund, which will take a whole account slice of risk from its Syndicate 2988, using a corporate member investment structure.

Willis Towers Watson has tipped that greater focus will be drawn to ILS domiciles and structures in 2020 amid an “unusual amount of innovation” from existing and emerging jurisdictions.

People moves in the ILS market December 2019.