$200bn loss may not floor London, but could herald huge ILS inflows

ORIGINAL PUBLICATION HERE

A new study that looks at how the London insurance and reinsurance market would cope with an unprecedented $200 billion convergence of catastrophic losses, suggests that while it would not be fatal for London market participants, it could result in a situation where the capital market floods in.

The study results were published today, we covered them over on our sister site earlier this morning, and suggest that London’s insurance and reinsurance players would be able to cope with a two-week period where a severe cyber attack loss, a major Florida hurricane, a significant stock market decline and the failure of a major re/insurance player all occurred.

Coping with such an extreme confluence of loss events would be tough for any insurance or reinsurance player, with massive losses expected across the industry and of course this would hurt the insurance-linked securities (ILS) market and collateralised reinsurance vehicles too.

Interest rate rise won’t reduce allocation to ILS market: Morgan Stanley

ORIGINAL PUBLICATION HERE

After the U.S. Federal Reserve hiked interest rates in December of 2016 analysts at Morgan Stanley have said that the move wouldn’t result in a reduction in the allocation of capital to the alternative reinsurance market, as investors favour the sector’s diversification over its returns.

Some risk transfer market analysts and observers warned that any rise in interest rates could result in investors leaving the insurance-linked securities (ILS) market in hope of better returns in other alternative assets. But analysts at Morgan Stanley have said that this simply isn’t the case.

“Recent rise in interest rate is not expected to impact allocation of alternative capital to the industry as pension funds and asset managers view them more from diversification benefit vs. pure returns,” said Morgan Stanley analysts in a market research report.

Almost 1/4 of pensions consider ILS investment, trustee comfort is key

ORIGINAL PUBLICATION HERE

Almost one-quarter of pension plans canvassed in a recent survey said that they are actively considering making new investments into the insurance-linked securities (ILS) asset class, but half of those surveyed said getting trustees comfortable with the asset class is the largest hurdle they face.

Investing in insurance and reinsurance linked assets continues to be an increasingly popular way to access alternative sources of return, which are considered diversifying with low correlation to wider financial markets.

The ILS investment market continued to grow in 2017, with estimates suggesting the ILS market now nears $80 billion in size, while the outstanding catastrophe bond market reached a new record high of $26.82 billion at the end of 2016.

Greater availability & use of leverage is increasing ILS limits: WCMA

ORIGINAL PUBLICATION HERE

Historically, investors in the insurance-linked securities (ILS) marketplace had little leverage to take advantage of, but in today’s market environment leverage presents itself in various forms, ultimately helping to increase ILS limits, according to Willis Capital Markets & Advisory (WCMA).

During 2016 ILS capital reached an impressive $75 billion but the additional leverage available in the ILS sector in today’s marketplace means that $75 billion in assets under management (AuM) no longer means $75 billion in limit, says WCMA in its Q4 2016 ILS Market Update.

In the past, explains WCMA, the size of the ILS market was determined by the ILS AuM, annual catastrophe bond issuance, and the volume of outstanding catastrophe bonds. But the evolution of the asset class in more recent times has seen its remit expand, and increasingly, ILS structures and arrangements provide additional leverage.

Всемирный банк: Отслеживание рисков землетрясений и наводнений в регионе Европы и Центральной Азии для повышения устойчивости к стихийным бедствиям

ОРИГИНАЛЬНАЯ ПУБЛИКАЦИЯ (ПОЛНЫЙ ТЕКСТ) ЗДЕСЬ

 

ОСНОВНЫЕ ПОЛОЖЕНИЯ

Новая публикация, выпущенная Всемирным банком и Глобальным фондом по снижению опасности стихийных бедствий и восстановлению (GFDRR) рассматривает текущие и будущие тенденции в отношении рисков, связанных с землетрясениями и наводнениями для 32 стран региона Европы и Центральной Азии (ЕЦА).

Healthy pipeline of ILS deals expected in 2017: LGT ILS Partners

ORIGINAL ARTICLE HERE

In a recent interview with Artemis, Christian Bruns, Hilary Paul, Pascal Koller, and Michael Stahel, LGT ILS Partners Portfolio Managers, noted an expectation for continued ILS sector growth in the coming months as market dynamics suggest additional interest in the space is likely.

LGT ILS PartnersThey discussed the key January 1st 2017 renewals season, the current pricing environment, and also explored the continued rise of the collateralised reinsurance sub-sector and what this might mean for the catastrophe bond space in 2017.

With more than 60% of reinsurance programmes renewing on January 1st, 2017, could you discuss any trends you witnessed during the recent, key renewals?

Our initial analysis indicates stable to slightly lower renewal rates, with a decrease of 5% to 10% for US placements, stable rates for European transactions and even some rate increases for loss-affected programs (especially in Europe, after the Summer floods and hail storms, as well as Australia). Rate reductions also varied considerably by coverage type: larger rate reductions were seen on liquid and easily tradable industry loss warranties (ILW) and some larger, repeat retrocession placements while rates for traditional reinsurance coverage and corporate business (insurance for large corporates) once again remained firmer.

IBI ILS Partners co-founded as Tel-Aviv ILS fund manager by Muraviev

ORIGINAL PUBLICATION HERE

Israel’s second largest independent investment management group, IBI Investment House, has teamed up with ILS portfolio manager Roman Muraviev to launch IBI ILS Partners Ltd., the first insurance-linked asset manager to be based in Tel-Aviv.

IBI Investment House managed around US$11 billion in assets currently, managing a range of private strategies for clients as well as mutual funds.

Roman Muraviev recently left ILS fund manager Twelve Capital, where he managed the catastrophe bond strategy for a number of years, but has reappeared as the co-founder and Managing Partner of newly established IBI ILS Partners Ltd.

Myanmar opening for business as government moves to liberalise local insurance market, says Axco

ORIGINAL PUBLICATION HERE

Axco Insurance Information Services (Axco) has released its latest non-life country report on Myanmar.   In 2016, the Ministry of Finance and Planning in Myanmar announced further plans to liberalise the insurance market, allowing foreign players into market. The government first opened up the insurance market to domestic and international insurers in 2012, breaking the monopoly held by state-owned Myanma Insurance.

Axco reports that at present, insurers can only compete on the basis of service to agents or clients, as Myanma Insurance controls rating, policy terms and conditions, and commissions. Additionally, independent companies can only underwrite certain classes.

85% of re/insurance execs see Americas Cup an opportunity for Bermuda

ORIGINAL PUBLICATION HERE

Some 85 percent of re/insurance executives are positive about the opportunities provided by the arrival of the Americas Cup to Bermuda this year, according to a survey by Bermuda:Re+ILS – but 15 percent of online readers fear it will be a distraction.

Bermuda:Re+ILS asked readers if they felt the event will benefit the re/insurance industry by putting Bermuda on the map and attracting clients or if it will be a distraction from doing serious business.

The results of the survey showed that just 15 percent of respondents said that it would be a distraction, with the other 85 percent saw it as being a positive.