African Development Bank to launch disaster risk financing programme

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The African Development Bank (AfDB) has announced the launch of its first climate risk management initiative, called the Africa Disaster Risks Financing (ADRiFi) Programme.

The comprehensive programme, which will initially run from 2019 to 2023, includes the provision of disaster risk insurance cover for poor communities in regional member countries, and is designed to reduce vulnerability to climate change and act as a safeguard against loss of livelihoods.

Bucharest hit by earthquake measuring 5.8 on Richter scale

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The Romanian capital Bucharest was hit by the strongest earthquake in 15 years on the morning of October 28, measuring 5.8 on the Richter scale.

While not strong enough to cause any major structural damage, the earthquake, which struck at 3.38am, shook houses and apartment buildings, sending many people running out into the street. The earthquake was also felt in Bulgaria, Moldova and Ukraine. An smaller aftershock occurred some two hours later.

“This earthquake was within the normal parametres for the Vrancea fault and we do not expect any further aftershocks,” said Constantin Ionescu, director of Romania’s National Seismology Institute.

Reducing Indonesia’s protection gap: Protectionism versus the protection gap

ORIGINAL PUBLICATION BY DAVID BENYON HERE

Destructive earthquakes hitting Lombok and Sulawesi in 2018 have highlighted the scale of the protection gap facing Indonesia’s re/insurance market. In October, the country’s insurance regulator used its industry rendezvous in Bali to call for ideas to kickstart further development of the country’s insurance sector.

However, rules limiting overseas re/insurance market access remain an obstacle to reducing the catastrophe prone country’s protection gap. International reinsurers are among those keen to play their part as stakeholders in closing the protection gap in Asia’s developing markets, Indonesia included.

Bermuda’s role in the global reinsurance market more relevant than ever: KBRA

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A report from Kroll Bond Rating Agency (KBRA) highlights the ability of Bermuda over the years to re/invent to address insurance and reinsurance market challenges, underlining its significance to the global re/insurance market.

Today, and despite an array of market headwinds, the island of Bermuda remains a seasoned provider of re/insurance and also a solution incubator fort the global risk transfer market, a role that KBRA feels is perhaps now more relevant than ever before.

Bill calls on U.S. to transfer Government risks to private sector capital

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A piece of legislation that is passing through the U.S. government houses at the moment calls on the United States government to be more proactive in transferring insurance related risks from federal programs to the private market.

H.R. 5381, also known as the “Government Risk and Taxpayer Exposure Reduction Act of 2018” or the “GRATER Act of 2018” has already been passed by voice by an important government committee, the House Oversight and Government
Reform Committee, and now insurance and reinsurance industry organisations are adding their backing to aid the bill’s passage.

BBC pension allocates to Securis managed ILS fund

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The pension fund of the BBC, or British Broadcasting Corporation, has made a fresh allocation to insurance-linked securities (ILS) in 2018, with a £98.1 million (approx. $127m) investment in an ILS fund managed by Securis Investment Partners.

The BBC Pension Trust had previously been invested in the ILS space, but exited back in 2015 when it pulled back on a mandate it had in place with ILS fund manager Nephila Capital.

That previous ILS mandate had been in place since late 2010 or early 2011, but then the BBC pulled back from ILS at a time when rates had been on a steep decline and so returns in the space as well.

Leadenhall raises over $600m for life ILS strategies

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Leadenhall Capital Partners LLP, the London headquartered specialist insurance-linked securities (ILS) and reinsurance linked investment manager, has significantly increased the size of its life insurance-linked securities (ILS) strategies this year, raising more than $600 million for them in the second-half of 2018.

The fresh capital raised for the life ILS strategies has helped Leadenhall to boost its overall life ILS assets under management to $2.5 billion, positioning the investment manager as one of the most balanced in ILS (across P&C and Life risks), given its total asset bases sits just above $5.2 billion (as of July this year).

Nephila investment roughly tripled in value for KKR

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Private equity, buyout and investments giant KKR & Co. L.P. (or Kohlberg Kravis Roberts) said today that its 2013 investment in the largest insurance-linked securities (ILS) and reinsurance linked investment manager Nephila Capital has generated a significant profit for the firm.

With Nephila Capital being 100% acquired by Markel Corporation, in a deal announced at the end of August, KKR is set to realise the profit generated by its investment in the ILS manager and it looks set to be significant.

KKR acquired a 24.9% stake in Nephila Capital in January 2013 for an undisclosed sum.

At the time KKR bought into Nephila the ILS manager had roughly $8 billion of ILS and reinsurance linked assets under management.

Hannover Re: $1.5bn of 2018 cat bonds generate low-risk margin for reinsurer

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German reinsurance giant Hannover Re said today that the approximately $1.5 billion of catastrophe bonds it has facilitated the issuance of for its clients help to deliver low-risk and attractive margins, while attracting new clients and maintaining existing relationships.

Hannover Re has become a key facilitator for the catastrophe bond and broader insurance-linked securities (ILS) market, as it acts as a fronting sponsor for cat bond issues and also provides fronting services for collateralised reinsurance deals.

By standing between clients and the capital markets, or fronting specifically for investors, Hannover Re enables other parties to use its rated paper to access sources of insurance or reinsurance risk and connect those with the most efficient forms of capital.

Schroders expands asset management reach with Lloyds Banking Group deal

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Global asset management group Schroders, which manages more than $3 billion of catastrophe bond and insurance-linked securities (ILS) assets, has announced a tie-up with Lloyds Banking Group that will give it an expanded reach to new clients and an £80 billion wealth management mandate.

For Schroders and its exclusive ILS advisor Secquaero Advisors Ltd., the Zurich-based specialists in intermediation of insurance and reinsurance risk to the capital markets, the tie-up with Lloyds will broaden access to capital that could be attracted to the cat bond, P&C ILS and life ILS investment strategies the group operate.