Up to 20% ILS rate increases as hard market ensues: Lane Financial

ORIGINAL PUBLICATION HERE

The Lane Financial LLC synthetic insurance-linked securities (ILS) rate-on-line index rose 15% during the final quarter of the year as ILS rates look to have entered hard market territory, while its analysis indicates ILS rates could rise up to 20%.

Based on ILS and catastrophe bond market pricing as of mid-December, the Lane Financial team conclude that “we are once again within hard market territory” explaining that “Our numbers indicate a 10 – 20% increase in rates.”

The reason for this is of course the recent loss experience of the ILS market, after the realised impacts of 2017 hurricanes and wildfires, the ongoing loss creep and increasing impact to aggregate structures from those same events, and now the added burden of fresh losses from 2018 catastrophes as well.

Premium income outweighs losses for Pioneer ILS Interval Fund

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Asset manager Amundi Pioneer Investment Management’s flagship dedicated insurance-linked securities (ILS) fund, the Pioneer ILS Interval Fund, managed a positive return of over 5% in the year to October 31st 2018, as premium income earned outweighed insured losses for the managers’ ILS portfolio.

The Pioneer ILS Interval Fund invests broadly across the ILS and collateralized reinsurance space, allocating to catastrophe bonds, private ILS deals, quota shares, sidecars and other collateralized reinsurance arrangements.

As a result the fund is broadly exposed to all of the natural catastrophe loss activity experienced over the last two years, but despite the regular occurrence of these losses the manager has achieved impressive performance in the twelve months to October 31st.

Stone Ridge says reinsurance risk premiums still pass “smell test”

ORIGINAL PUBLICATION HERE

According to alternative risk premia focused mutual fund manager Stone Ridge Asset Management, the returns possible from reinsurance risk premiums still pass its “smell test” as an asset class with long-term value for investors.

Stone Ridge looks to provide its investors with access to the returns of businesses (their profits and losses), rather than their linkages to the capital markets, in diversifying classes, and as a result investing in insurance-linked securities (ILS) and reinsurance has been one of its most successful areas of operation to-date.

However the ILS and reinsurance funds have been hit by losses after the heavy natural catastrophe toll of the last two years, with its flagship interval-style mutual ILS fund, the Stone Ridge Reinsurance Risk Premium Interval Fund even having shrunk slightly in the final quarter of its year to October 31st.

Эль-Ниньо сделает 2019 год рекордно теплым

ОРИГИНАЛЬНАЯ ПУБЛИКАЦИЯ ЗДЕСЬ

Москва. 28 декабря. INTERFAX.RU – Метеорологи предполагают, что 2019 год может стать для планеты самым теплым за всю историю инструментальных наблюдений, заявил научный руководитель Гидрометцентра России Роман Вильфанд.

“По климатическим моделям, другим статистическим исследованиям следующий год может быть самым – в целом по глобусу – самым теплым за всю историю метеонаблюдений”, – сказал Вильфанд на пресс-конференции.

African Risk Capacity (ARC) Agency and African Development Bank (AFDB) increase accessibility to Climate Risk insurance for Africa

ORIGINAL PUBLICATION HERE

Through partnership and innovative financing, ARC and AfDB are tackling one of the biggest challenges in closing the protection gap in Africa: premium financing.

In January 2017, the ARC and AfDB partnered to improve disaster risk financing infrastructure, capacities, and policies across the continent by harnessing the financial expertise, in-country reach, and dedication to building a climate resilient Africa of both institutions

On 26 October 2018, AfDB approved the Africa Disaster Risk Financing Programme (ADRiFi), an initiative that will assist African governments in overcoming one of the largest impediments in fully benefitting from ARC’s risk management tools: premium financing.

ILS market dominated by U.S. property cat excess-of-loss: BMA

ORIGINAL PUBLICATION HEREils-risk-by-region

The insurance-linked securities (ILS) market and alternative capital use in reinsurance is dominated by property catastrophe excess-of-loss contracts, a study by the Bermuda Monetary Authority (BMA) found.

Around 40% of the Bermuda based ILS market’s aggregate exposure comes from the United States and U.S. cedents led the way with 65% of gross written premiums (GWP) coming from the country.

Optimism & panic at renewals, but improving reinsurance returns expected

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There is a mix of optimism and panic as the key January 1st reinsurance renewal rapidly approaches, after losses, market improvement programs at Lloyd’s and a chaotic retrocession market, all continue to make conditions challenging for some.

But the longer-term outlook is for improving reinsurance returns generally, which will encourage ILS investors who are largely set to hold steady for January as they await the outcome of late and sometimes hotly contested renewals.

We’re being told that some markets, both traditional reinsurance and insurance-linked securities (ILS) funds, are still not quoting on renewal requests, even at this late stage.

Miller completes acquisition of ILW broker Alston Gayler (AG)

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Miller Insurance Services LLP, the London broker majority owned by Willis Towers Watson (WTW), has completed its acquisition of Lloyd’s accredited and London headquartered insurance and reinsurance broker Alston Gayler (AG).

Alston Gayler has a recognised ILW broking practice specialty and experience broking to collateralised reinsurance markets as a result and is well-known to the insurance-linked securities (ILS) fund world, placing business with ILS funds on an industry-loss and collateralised indemnity reinsurance or retrocession basis.

The acquisition was first announced back in October, although terms of the deal were not disclosed.

ASEAN countries to establish disaster risk insurance facility

ORIGINAL PUBLICATION HEREasean+3-countries-map

A number of countries belonging to the Association of Southeast Asian Nations (ASEAN) have signed a Memorandum of Understanding for the establishment of the region’s first disaster risk financing facility.

The Southeast Asia Disaster Risk Insurance Facility (SEADRIF) will initially comprise a trust and an insurance company in Singapore, working in partnership and with technical support from the World Bank.

It will also provide a catastrophe risk insurance pool for ASEAN+3 countries, which include the Southeast Asian nations plus China, Japan and the Republic of Korea.