First terrorism risk cat bond oversubscribed: Pool Re

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Pool Re, the UK government-backed mutual terrorism reinsurance facility, has now successfully completed the issuance of its first terrorism risk catastrophe bond, the £75 million ($97m) Baltic PCC Limited (Series 2019) with the placement said to have been oversubscribed thanks to ILS investor support.

The insurance-linked securities (ILS) market has seen terrorism risk before, of course. As long ago as 2003, the cat bond market saw a transaction called Golden Goal Finance Ltd. which provided event cancellation protection against risks including terror attacks.

Bermuda Stock Exchange lists its first UK catastrophe bond

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The Bermuda Stock Exchange (BSX) has become the listing home for notes issued under a UK domiciled catastrophe bond structure for the first time, as the £75 million of notes issued for Pool Re’s first terrorism cat bond find a home there.

The £75 million Baltic PCC Limited (Series 2019)terrorism catastrophe bond transaction completed this week, providing sponsor Pool Re with a source of retrocessional reinsurance protection for property damage caused by terror attacks, backed by the capital markets.

RenRe grows third-party capital managed to $4.1 billion

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Reinsurance firm and third-party capital manager RenaissanceRe grew its insurance-linked securities (ILS) assets under management (AuM) by $500 million in 2018, with much of the increase coming from its recently launched Vermeer Reinsurance Ltd. strategy as well as growth in its Upsilon vehicle.

In line with analysts’ expectations, RenRe increased its third-party, or alternative reinsurance capital operations in 2018, with the total AuM across its funds/strategies jumping from $3.6 billion at the end of January, to $4.1 billion as of the end of December, 2018.

Orchid hires Joe Zuk as the MGA looks to ILS for catastrophe capacity

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Orchid Underwriters Agency, LLC, a property catastrophe focused managing general agency (MGA), has hired Joe Zuk, previously of Atlas General Holdings, to the new role of Managing Director of Corporate Development & Strategy.

Zuk has significant experience within both the MGA world and gained as a reinsurance broker.

His work in recent years has seen him increasingly interface with the insurance-linked securities (ILS) market as he looked to identify new and alternative sources of capacity to back pools of MGA originated risk.

Capital markets needed to cover the really big catastrophes: Swiss Re CEO, Mumenthaler

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It’s always refreshing to hear that the original premise for the capital markets entry into reinsurance holds true, even for the very largest reinsurers in the world.

Speaking this morning, Swiss Re CEO Christian Mumenthaler acknowledged that the insurance-linked securities (ILS) market is a necessary force within insurance and reinsurance, as the depth or the global capital markets are required to support the underwriting of insurance in the peak catastrophe zones.

Asked about the influence and competition from insurance-linked securities (ILS) markets, the Swiss Re CEO said that he distinguishes between the fully securitised ILS product (so the catastrophe bond) and what he terms alternative capacity.

Climate catastrophe risk models launched by AbsoluteClimo

ORIGINAL PUBLICATION HEREAbsoluteClimo 2019 catastrophe loss prediction table

AbsoluteClimo, a climate and weather modeling, forecasting and risk management firm based in Hawaii, has launched what it calls the “World’s First Catastrophic Risk Models Linked To Skillful Climate Physics Prediction.”

Climo๏Cats (ClimoCats), as its climate catastrophe risk models are called, will enable insurance, reinsurance and insurance-linked securities (ILS) market participants to operate their businesses based on a forward-looking view of climate related risks, rather than reactively following the output of models that analyse historical data.

United Nations initiatives look to parametric & index insurance for Pacific islands

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A group of United Nations backed initiatives are looking to expand the use of parametric or index insurance and reinsurance in the Pacific region, with a study expected to identify new use-cases and possibilities to drive uptake.

The Pacific islands are not strangers to parametric insurance, having a World Bank supported Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) initiative and the Pacific Catastrophe Risk Insurance Company (PCRIC) already operational in the region.

PCRIC leverages parametric disaster risk pooling and then approaches the reinsurance market to get the best price for sovereign level disaster coverage for Pacific island nations.

Cat bond market’s merit underscored. Rate hardening expected: Swiss Re

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The catastrophe bond market’s merit was underscored by the way it continued to operate effectively despite recent volatility stimulated by catastrophe losses, but after the losses it is expected that investors will want to see cat bond rates harden, according to Swiss Re.

The global reinsurance firm has published its latest review of the catastrophe bond and insurance-linked securities (ILS) market, analysing issuance through the final months of 2018.

Swiss Re highlights the challenges faced by cat bond investors and cat bond investment fund managers through 2018, both due to fresh losses occurring during the year as well as the hangover left behind by 2017 loss events.

Asia-Pacific Disasters

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Recent disasters in Indonesia serve as a call to risk-prone countries throughout Asia and the Pacific to build and vigilantly maintain resilience to catastrophes.

Committee recommends disaster insurance in Nat CAT regions

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A Parliamentary panel has proposed comprehensive insurance coverage for all properties located in disaster prone areas.

The Standing Committee on Finance noted that India has become more vulnerable in recent years to floods, droughts, cyclones, earthquakes, landslides, avalanches, etc, due to factors such as climate change, deforestation, and encroachments, etc, reported The Times of India. Out of 36 states and union territories, 27 are disaster-prone.

The panel studied recent devastating cyclones, floods and landslides in Odisha, Andhra Pradesh, Tamil Nadu, Karnataka and Kerala and the financial constraints faced by the affected states in meeting relief, rehabilitation and reconstruction expenditure.