January reinsurance renewals set to be extremely competitive

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Reinsurance firms and ILS funds looking to make the most of any increase in rates at the forthcoming January renewal season are likely to make this one of the most competitive in years, which could ultimately mean that price rises are even more short-lived than currently expected.

Following the roughly $100 billion of industry-wide catastrophe losses expected from events so far this year, the expectation is that reinsurance and retrocession rates are set to rise.

Some have called for retrocession rates to rise by as much as 50% at the upcoming January renewals, while reinsurance rates have been slated to rise by 10% to 20% on loss hit programs, with broader 5% rate rises forecast.

Tangency Capital founded by Morgenstern, Hagedorn & Jedraszak

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Tangency Capital Ltd. is a new insurance-linked securities (ILS) start-up venture that has been founded by three experienced ILS and reinsurance convergence focused executives and will focus on helping its investors to access opportunities in insurance and reinsurance, from offices in Bermuda and London.

The three founding members of Tangency Capital Ltd. are well-known in the insurance-linked securities (ILS) and reinsurance convergence space, with each bringing their own experience and skills to the start-up.

Kai Morgenstern, formerly of RenaissanceRe is one of the founders. Morgenstern had worked with RenRe for some years, leading their capital markets risk transfer activities with a focus on the reinsurance firms joint-venture vehicles, third-party capital and ILS investor facing activities.

Alternative thinking: the historic rise of ILS

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Aon Securities has published its annual ILS report: Alternative Capital Breaks New Boundaries. Paul Schultz, its chief executive, tells SIRC Today about the key developments during what has been a record year for ILS.

It has been a record year for insurance-linked securities (ILS) in several ways. In the six months to June 30, 2017, some $8.5 billion of catastrophe bonds had been issued—far higher than even the most bullish estimates at the start of the year, and exceeding any annual issuance total on record.

Paul Schultz, chief executive of Aon’s investment banking team, Aon Securities, says that even his own forecast of around $8 billion issuance for 2017, which was viewed by many at the time as optimistic, had since proved to be too conservative.

Parametric Insurance Explored for U.S. Disasters

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Catastrophic losses this year due to extreme weather events has led to a growing interest in parametric insurance in the U.S., according to industry experts. Weather stations and satellite images are helping to make parametric coverage an affordable, and increasingly, viable option.

Nigel Brook, partner at global law firm Clyde & Co., wrote about the concept of parametric insurance in 2016. He sees growing interest in parametric insurance both in the U.S. and in Europe.

Protectionist regimes are a challenge to reinsurers targeting growth in Asia

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Asian regulators are continuing to enhance and improve their regimes, and several Asian countries are adopting protectionist measures to expand their domestic reinsurance market, Christopher Han, associate director at Fitch Ratings, told SIRC Today.

“Localisation is a prevalent theme that we observe in certain countries,” he said, citing Indonesia, India and China.

In Indonesia, a domestic cession policy introduced in 2014 has led to an increase in domestic reinsurance, he noted.

$9 billion of collateralised retro estimated blown or trapped

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Of the $29 billion of total retrocessional reinsurance capacity tracked by broker Aon, an estimated $9 billion, or 31% is collateralised and either completely blown or trapped as a result of recent catastrophe events, according to Robert Bisset, Chief Executive Officer (CEO) of Global Re Specialty, Aon Benfield.

Following the devastating effects of hurricanes Harvey, Irma and Maria on parts of the U.S. and the Caribbean, Aon Benfield executives discussed the impacts to the global reinsurance and alternative capital markets, including the retro space, which has been widely debated since the storms.

Present in times of catastrophe

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The 2017 hurricane season could be a defining moment for Bermuda. Greg Wojciechowski of the Bermuda Stock Exchange outlines why this Atlantic storm season may define Bermuda’s role in the world for years to come.

Hurricanes Harvey, Irma and Maria are the latest in a growing stream of increasingly costly mega-disasters that prove the importance of our markets in the global economy.

Reinsurance and the ever-evolving insurance-linked securities (ILS) sector bring much-needed cover and relief when nature strikes, allowing governments and businesses to get back up and running and insurers to pay out claims.

Column: ‘Scope And Speed Of ILS Development’

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[Opinion column written by Ross Webber]

I was privileged to join a group of venerable industry leaders this month on a panel about the power of disruption.

It was a discussion hosted by the Bermuda Under 40s Reinsurance Group about the innovative influence of the Bermuda market to transform this industry in 2017, the way it has for decades. In a globalised market, we were asked, was Bermuda an X-factor?

巨灾债券是缩小保障缺口的关键

2017年10月25日 Intelligent Insurer 原始采访译文。 PDF版本在这里

承保透明且容易理解的的巨灾债券(包括使用指数触发的债券)可能成为新兴经济体的一种最有效的风险转移工具,并在宏观层面上解决保障缺口的问题。Phoenix CRetro 首席执行官基里尔·萨夫拉索夫 (Kirill Savrassov),百慕大ILS领域专家,今日巴登巴登栏目对其进行了采访。

萨夫拉索夫认为,对于面临多种灾害威胁和处在历史和地理上的高峰带的大国而言,那些突如其来的破坏性的打击,可能对整体经济发展产生非常不利影响。“我们承认,当地市场发展的速度仍然很慢。经过25年的自由发展,整个中欧和东欧地区的保险市场平均普及率只有2.5%,而前苏联国家地区的数字要低得多,” 萨夫拉索夫提到。他认为ILS机制不仅可以为各国政府提供可靠的保护,获得更快地恢复灾后财务保障,而且有助于解决普及率低和整体未参保的问题。

Protectionism continues to create dangerous risk concentrations

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Jurisdictions that adopt protectionist measures in (re)insurance can dangerously concentrate risk in their own economies. In a new insight briefing on protectionism, Insurance Europe, the European insurance federation, sets out examples of current protectionist measures and the problems they create for the very economies they seek to protect.

An example of commonly used protectionist measures are compulsory cessions, or “rights of first refusal”. These oblige local insurers to cede their risks to local, often state-owned, reinsurers. They are in force or under consideration in a wide range of African, South American and Asian countries.