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The Reinsurance Evolution Continues: Executive Summary

GC Capital logoORIGINAL REPORT IN PDF HERE

During the past twelve months, capital has continued to flow into the reinsurance markets in the form of both insurance-linked securities (ILS) and collateralized reinsurance transactions. This report examines the growth in the ILS market during the past year and some of the important evolutionary elements of catastrophe bond structure and risk transfer. We also explore how the use of capital markets-based capacity provides cost savings for public entities by helping them build surplus, reduce public debt and limit the risk that natural perils can pose to the state’s balance sheet. As collateralized markets continue to increase in importance as an alternative to both traditional reinsurance and ILS, Guy Carpenter has taken an active role in analyzing counterparty risk and developing specific structures and strategies to manage this risk. This report also provides an overview of the manner in which Guy Carpenter assists its clients in managing counterparty risk and limiting credit exposure.

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Bermuda Taxation, Global Cooperation & Reputation (Key points)

bda_logoBermuda’s tax system was not created to “lure” foreign companies.

The Island’s tax system, in place for more than a century, was made to suit the needs of our jurisdiction—and built on taxing imports. This consumption-based, duty-tax system provides revenue for Bermuda’s Government to support the Island’s infrastructure. Unlike larger countries, Bermuda does not have the burden of large-scale infrastructure, healthcare and social insurance systems that require support via income or corporate taxes.

There are taxes in Bermuda.

The Island does not levy income tax or corporate taxes, but instead imposes payroll tax, import duties and custom duties on goods and services under its consumption-based approach. Custom and payroll duties form a major component of the Island’s tax revenues.

Re/insurance and ILS have important role in climate change battle

ORIGINAL PUBLICATION HERE

The latest independent review from ClimateWise, which was prepared by PwC, highlights the important role that insurance, reinsurance and insurance-linked securities (ILS) can play in the financial fight against the perils of climate change.

Following the United Nations Framework Convention on Climate Change (UNFCCC) meeting in Lima, Peru of December this year, ClimateWise has released their 2014 report revealing what the organisation believes the insurance and reinsurance market could, and should be doing to help.

artemis

Swiss pensions look to ILS as alternative asset, but regulation hinders

artemisORIGINAL PUBLICATION HERE

Switzerland-based Pensionskassen, or pension funds, are increasingly looking to alternative and risk-based investment strategies and as a result the insurance-linked securities (ILS) asset class is gaining popularity, according to reports.

A recent article by Investment & Pensions Europe (I&PE) explores changes in the risk allocation strategies of the Swiss pension sector, stating that firms are increasingly looking to alternative risk-based strategies to bolster their portfolios with diversified sources of return from risk-based assets, and achieve higher yields.

artemis

2015 Atlantic hurricanes, early forecasts suggest average to below season

artemisORIGINAL PUBLICATION HERE

Early forecasts for 2015 Atlantic tropical storm and hurricane season activity suggest an average to slightly below average season, but there is some divergence of opinion this far out from next years tropical storm season.

As ever the first forecast for 2015 Atlantic hurricane season activity comes from Tropical Storm Risk, who say that their extended range forecast suggests another below average season next year.

Investing in Alternatives, Europe – report by Clear Path Analysis

ORIGINAL PUBLICATION  HERE 

Historically, pension funds and insurers have been hesitant to allocate to alternative investments due to their premium fees. However, greater understanding over recent years of their uncorrelated nature with those of the stock and bond markets and their costs and consequential higher returns, means they are now at the forefront of investors’ minds and are an increasingly important asset class in a portfolio.

The Investing in Alternatives, Europe report will bring together European based pension plans, insurers, endowment funds, foundations and private banking and wealth groups to explore the rationale for alternative asset allocation, selecting the most appropriate strategy for your objectives as well as the role of alternatives in DC pension schemes.

Entropics cat bond fund approved by CSSF, set to open in Sweden

ORIGINAL PUBLICATION HERE

Entropics Asset Management AB has now had its first ILS fund, the SEF Entropics Cat Bond Fund, approved by the Luxembourg financial supervisory authority, the CSSF, and passported into the Swedish Market allowing it to be officially opened for business.

Entropics is the first insurance-linked securities (ILS) and catastrophe bond fund manager to be established in Scandinavia. Entropics received its license from Finansinspektionen, the Swedish Financial Supervisory Authority, in July and has been planning to launch its first UCITS catastrophe bond fund, the SEF Entropics Cat Bond Fund, in time for an expected pick-up in issuance around the first-quarter of 2015.

Now that the SEF Entropics Cat Bond Fund has been approved and authorisation received from the Commission de Surveillance du Secteur Financier (CSSF), Entropics can open the fund at its own discretion. Entropics is now the ninth fund manager globally to have a UCITS compliant cat bond fund available for investors to allocate capital to.

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Future is bright for Bermuda: Lloyd’s chairman

Bermuda Re logoORIGINAL PUBLICATION HERE

The future for Bermuda and London is bright, according to John Nelson, chairman of Lloyd’s.

In a speech to the Bermuda Monetary Authority (BMA), Nelson said: “I believe the future facing London and Bermuda – indeed the industry as a whole – is a bright one. We have a truly extraordinary opportunity over the next decade.”

america cup

Press Release: Appleby named official law firm of the 2017 America’s Cup

america cupORIGINAL PRESS RELEASE HERE

Appleby has been named as the Official Law Firm of the 2017 America’s Cup. Appleby’s Bermuda office will be providing the America’s Cup Event Authority with a full range of legal services for the 35th America’s Cup which will be held in Bermuda in 2017.

Appleby is widely regarded as a leading firm providing first class corporate and commercial legal services. As one of Bermuda’s oldest firms, it has been serving clients since it was founded by Major Appleby in 1897.

Wilmington trust

Wilmington Trust Hires Insurance Trust Veterans Todd Winchel and Robert Quinn

Wilmington trustORIGINAL PRESS RELEASE HERE

NEW YORK, Nov. 13, 2014– Todd Winchel and Robert Quinn joined Wilmington Trust’s Global Capital Market division to lead the Insurance Collateral Solutions business. Winchel will lead product management, and Quinn will manage client development efforts. They will be based in Wilmington Trust’s office in Manhattan.

“Together, Robert and Todd bring a keen awareness of collateral options,” said Jack Beeson, head of Wilmington Trust’s Global Capital Markets division. “Over the past 15 years they have demonstrated their devotion to their clients, and built strong reputations in the industry for both service and attention to detail. Todd and Robert will be instrumental in further strengthening our position in the insurance and reinsurance marketplace.”