Negatives weighed & reduced expected renewal price rises: Lohmann

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Global asset management group Schroders observed a mixed outcome at the January 1st, 2018 renewals, with insurance-linked securities (ILS) business experiencing lower-than-anticipated rate increases across all lines, according to Dirk Lohmann, CEO of Secquaero Advisors AG and Daniel Ineichen, Head of ILS Portfolio Management at Schroders.

In a recent webcast, the pair discussed the performance and response of the ILS, or alternative reinsurance market at the January 2018 renewals, in light of the devastating impacts of third and fourth-quarter 2017 catastrophe events. Secquaero Advisors acts as exclusive investment advisor on structuring, origination and other matters to Schroders in its ILS business.

Disaster resilience & risk transfer on agenda for ASEAN ministers

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Finance ministers from the Association of Southeast Asian Nations (ASEAN) group of countries are set to discuss disaster resilience and risk transfer at meetings scheduled for next week in Singapore, with the group looking to find ways to bring disaster risk financing up to speed.

Economic growth has far outpaced the availability of disaster risk financing in the region, the ministers believe, so the meetings scheduled for next week will have a focus on this area and what can be done to enhance ASEAN members access to disaster insurance, as well as what can be done to increase their resilience.

Singapore is the ASEAN chair for 2018 and the countries Finance Minister Heng Swee Keat explained the importance of disaster resiliency for the region.

Eckert’s IncubEx raising funds. Catastrophe risk trading a target?

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IncubEx, the product and service development firm that counts its founder and Chairman as insurance and reinsurance entrepreneur and Brit co-founder Neil Eckert, is in the market raising funds and we’re told that one of the target products the firm is working on is catastrophe risk trading.

IncubEx was launched in 2017 “a financial markets incubator and business development team,” looking to utilise its experience and market relationships across sectors such as global energy, environmental commodities, reinsurance, and related asset classes, the firm said at the time.

Bermuda leads in ILS innovation

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2017 was a record-breaking year for ILS—and Bermuda again led from the front in terms of being both the domicile of choice for the special purpose vehicles issuing ILS and a hub of innovation for new structures and risks.

Bermuda remains the leading jurisdiction for the issuance of catastrophe bonds. Insurance-linked securities (ILS) issued from Bermuda represented 76.1 percent ($22.5 billion of $29.5 billion) of total outstanding capacity at the end of Q2 2017. Since 2010, 185 Bermuda-based special purpose insurers (SPIs) have been registered and have issued 187 ILS deals.

The importance of capacity provided by the ILS markets is now well understood by most working in the risk transfer industry. And it is becoming ever more important. In 2017, the catastrophe bond market reached a new record in 2017 with a combined total capacity of $10.7 billion, according to an Aon Securities report.

The Insurance-Linked Securities Year-End 2017 Update report reveals that during 2017, 35 catastrophe bonds were issued by 31 different sponsors.

UK wants China to use its new ILS framework for catastrophe bonds

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The United Kingdom government has been courting China and trying to encourage the country to looktowards the UK and its recently enacted insurance-linked securities (ILS) regulatory and tax framework as a vehicle to help China and its entities gain access to greater disaster insurance or reinsurance protection.

In December 2017 the UK’s Chancellor of the Exchequer Philip Hammond met with Chinese Vice Premier Ma Kai and other officials to discuss economic and financial issues and potential areas of cooperation between the two countries.

One of the topics up for discussion and touched on during the sessions was disaster risk insurance and the fact both countries are committed to helping to enhance disaster insurance protection both at home and around the world.

2018 a good time to enter ILS, or increase allocations: Mercer’s Howie

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Insurance-linked securities (ILS) remain an attractive and diversifying asset class, and with returns now expected to be higher following 2017 catastrophe events and the subsequent impact on reinsurance industry pricing, Mercer’s Robert Howie suggests investors should look to the space in 2018.

“With expected returns now higher, we believe existing investors should consider increasing their allocations (with sensible diversification limits), and those not currently invested should consider or reconsider the asset class,” said Howie, a principal in the Hedge Fund Boutique of Mercer’s wealth business, as part of Mercer’s March, 2018 Research Perspectives report.

AP3 increases ILS allocation by 56% year on year

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Swedish state pension fund AP3 reported that its ILS allocation increased by 56.3 percent in US dollar terms throughout 2017, rising to $505.8mn (4.14bn kronor) at year-end.

This came as its insurance portfolio delivered returns of 2.9 percent last year, despite heavy catastrophe losses.

AP3 said its strategy of seeking “direct, efficient market access” to ILS had put it in good stead to handle high hurricane activity, according to translated comments in its annual report.

Efficiency to expand protection that ILS provides: Greg Reisner, A.M. Best

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Demand in the expanding and increasingly influential insurance-linked securities (ILS) market remains strong, and as the space grows, capital markets-backed capacity will cover more of the re/insurance industry’s losses from major events, according to Greg Reisner, a Director at international ratings agency, A.M. Best.

Speaking with A.M. BestTV at Artemis’ second New York City ILS event held in Manhattan in early February, 2018, Reisner said the market responded well to what was the first big, real test for convergence capacity.

Echoing the views of many insurance, reinsurance and ILS market participants and observers following the impressive response of the investor base in the aftermath of one of the costliest catastrophe loss years on record, Reisner said that “without a doubt,” ILS capital is here to stay.

Почему страховые ценные бумаги нуждаются в региональном разнообразии

ПЕРЕВОД ОРИГИНАЛЬНОЙ СТАТЬИ

Ураганы 2017 года показали ложность позиции, ставящей под сомнение устойчивость рынка страховых ценных бумаг (ILS). Инвесторы не покинули рынок, столкнувшись со страховыми убытками. Вместо этого, наоборот, произошло не только пополнение участвующего капитала, но и его значительное увеличение. Рынок продемонстрировал, что он может эффективно поддерживать страховщиков и перестраховщиков в результате подобных кризисов. Отрасль ILS, возникшая после урагана «Эндрю» в 1992 году и развившаяся после урагана «Катрина» в 2005, достигла своей зрелости.

ILS central to keeping UK re/insurance at “cutting edge” – Government

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nsurance-linked securities (ILS) are central to keeping the UK’s insurance and reinsurance industry “at the cutting edge”, the Government says, and the work to bring the recently introduced ILS legislation in the UK is an example of how industry and Government can collaborate, to the benefit of the economy.

Tonight (Monday 26th March 2018), insurance-linked securities (ILS) sector investors have been invited to a reception at Number 11 Downing Street as the Chancellor of the Exchequer and industry body the London Market Group host an evening to mark the passing of the UK’s ILS legislation in December 2017.