CAT bonds can bridge the protection gap


As China grapples with the twin issues of increasing natural hazards and low insurance penetration, the economic progress it achieves tends to be annihilated. Catastrophe bonds can be a viable solution to this problem. Asia Insurance Review spoke with two insurance-linked securities experts to discuss the feasibility of CAT bonds as a risk transfer mechanism in China.

China has always been exposed to natural disasters. Typhoons, earthquakes, tsunamis, floods, landslides and wildfires have occurred throughout Chinese history. Some of these events have been the most destructive, particularly in terms of fatalities.

In recent years the impact of these perils has grown and some of them are becoming even more frequent and severe. Exposure to risk in China is changing.

London Stock Exchange can make listed ILS securities tradable


London Stock Exchange (LSE) is able to make any catastrophe bonds or other insurance-linked securities (ILS) that are listed on its International Securities Market (ISM) tradable if the issuer requires this feature.

London Stock Exchange recently put in place the rules necessary to allow for listing of catastrophe bonds and other ILS securities on its International Securities Market, as it seeks to ensure that ILS securities that require a listing can find a home in the UK.

With the UK now having its ILS regulatory framework in place and a number of transactions already completed, the most recent being the first pure terror risk cat bond sponsored by government backed mutual reinsurance firm Pool Re, finding a home in the UK for listings of ILS notes is now also an option and with this can come the ability to allow secondary trading.

Watford Re IPO’s on Nasdaq at discount to book value


Watford Holdings Ltd., the parent company to Arch Capital and Highbridge Principal Strategies backed investment oriented or total-return style reinsurance firm Watford Re, successfully completed its initial public offering (IPO) on the Nasdaq.

Watford Re is a valuable component of Bermudian insurance and reinsurance firm Arch Capital’s strategy to embrace third-party capital, bringing additional efficiency and income to the firms overall operations.

Backed by third-party, largely institutional investors, Watford Re follows a total-return or hedge fund like strategy.

It underwrites mid to longer-tailed, largely casualty reinsurance business with the assistance of the Arch Capital platform, while asset manager Highbridge Principal Strategies invests the reinsurers long-term assets in strategies aiming to achieve a higher return than a typical re/insurer would normally seek.

SCOR Investment Partners names Rostan to lead ILS, as Prabis departs


SCOR Investment Partners has appointed Sidney Rostan as its new Head of Insurance-Linked Securities (ILS), a role he will take on from April 1st, 2019 as previous Head of ILS Vincent Prabis is set to depart.

Rostan has been with SCOR Investment Partners (SCOR IP), the investing wing of the French reinsurance firm of the came name, since July 2015 working as a Senior ILS Portfolio Manager.

He will take charge of the ILS investment management business, which includes portfolios featuring catastrophe bonds and collateralized reinsurance contracts.

Lloyd’s can “nurture” alternative capital: CFO John Parry


The Lloyd’s insurance and reinsurance market can “nurture” alternative sources of capital, CFO John Parry just explained in a press briefing, as the world’s oldest risk market looks to take a more open-minded approach to helping investors access its underwriters returns.

Of course the gradual opening up to alternative sources of reinsurance capital at Lloyd’s has been underway for some years and now we finally have a little more clarity about just how open to investors the market may become.

One caveat though, Lloyd’s leadership say they are open to all possible eventualities, however the way capital enters the market and is used will likely be designed to support the status quo of its members, rather than really seek to disrupt it.

ILS could be attractive to $1 trillion alternatives “dry powder”


Alternative investment managers and funds are sitting on approximately $1 trillion of undeployed capital or “dry powder” and with few other attractive opportunities available, insurance and reinsurance linked investing has been cited as one of the more attractive asset classes.

Alternative asset managers face a challenge currently as their investors want to deploy far more money than they are able right now, as investment managers have begun to shy away from some areas of the alternatives market.

Asset classes aren’t looking as stable as they once were and there is a growing fear of the amount of credit and leveraged investment opportunities among some, leading to a conundrum over where to deploy capital in order to secure the returns investors are demanding.

پتانسیل ILS در ابتکار کمربند و جاده

با توجه به چنین هزینه های به تریلیون دلار و تحولات اصلی در 68 کشور که در سه قاره گسترش یافته است، بسیار طبیعی است که ابتکار کمربند و جاده چین در همه کشورهای شرکت کننده و بخش های تجاریتوجه خاصی را جلب می کند. AsiaInsuranceReview با Kirill Savrasov مدیر اجراییPhoenix C Retroبرمودای ILS در مورد اوراق بهادار مربوطبه بیمه به عنوان گزینه انتقال خطر با BRI صحبت کرد.

احتمالا ابتکار کمربند و جاده چین (BRI) یکی از بزرگترین پروژه های توسعه زیربنایی در تاریخ مدرنبشریت است. Kirill Savrasov، رئیس اجرایی بیمه بازنشستگیPhoenixCRetroReinsurance ، گفت: “با توجه به اندازه و تنوع جغرافیایی، پروژه های مرتبط با BRI قطعا با چالش ها و خطرات زیادی روبرو شده اند که هم برای آغازگر( مبتکر) پروژه و هم برای همه شرکت کنندگان دیگربه عنوان تخمین های فعلی برای تبدیل این پروژه به یک واقعیت از 900 میلیارد دلار تا چند تریلیون متغیر به حساب می آیند و اغلب هزینه های مالی وخدامت (زحمت)توسط شرکت های دولتی انجام می گردد.

Lloyd’s “prospectus” set to deliver third-party capital & ILS friendly message


Lloyd’s of London, the oldest and most unique marketplace in the world for placing insurance and reinsurance business, is set to adopt a friendlier tone when it comes to third-party capital and ILS, according to observers and market participants.

Lloyd’s is set to deliver its so-called “prospectus” along with its annual results tomorrow, which will set out a vision for the future of the market under the new leadership of CEO John Neale and we’re told it will be more welcoming to the capital markets as a capacity provider.

In the past, Lloyd’s largely ignored the development of the insurance-linked securities (ILS) market and had its head in the sand.

More disciplined, cautious, or just smarter reinsurance capital in 2019?


The annual Association of Insurance and Financial Analysts (AIFA) conference was held at the start of this month and insurance and reinsurance executives debated the influence of alternative capital and ILS, while analysts questioned whether it’s more disciplined and cautious, or if reinsurance capital as a whole is becoming smarter this year.

The losses of 2017 / 2018 and their impact on insurance-linked securities (ILS) markets and retrocessionaires resulted in some contraction and restructuring, of the reinsurance market’s capital base around the January 2019 renewals.

With that renewal season now behind us and the market looking forward to April and beyond to June / July, the question of whether the ILS market and alternative sources of reinsurance capital will raise new capital and influence rates in some adverse way, seem to be front of mind for many and particularly considered a concern for Florida at June 1.

Solidum issues $12m private catastrophe bond using ILSBlockchain


Solidum Partners, the Swiss specialist insurance and reinsurance linked investment manager, has completed a $12 million Jungfrau IC Limited 2019 private catastrophe bond issuance, which is the fourth to use the firms blockchain system.

Solidum Partners became the first in the world to create and settle a securitised catastrophe reinsurance contract using the private blockchain in 2017, which it named the ILSBlockchain.

This is now the fourth issuance of private cat bond notes on this blockchain system, with the total amount of catastrophe bond securities on this blockchain now sitting at $50.1 million.

This $12 million issuance is the first 2019 catastrophe bond to be issued using the blockchain. It was issued in January.