Singapore Gov calls for catastrophe bond cooperation with China

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China’s western region and in particular the municipality of Chongqing with its population of over 31 million, which includes the megacity of the same name, could benefit from cooperation on topics such as disaster insurance, with catastrophe bonds seen as an opportunity, according to the Singapore government’s Monetary Authority.

Speaking at the 3rd Singapore-China (Chongqing) Connectivity Initiative (CCI) Financial Summit this week, Ravi Menon, Managing Director at the Monetary Authority of Singapore highlighted disaster risk insurance and reinsurance as a key area for the two countries to cooperate on.

Singapore has opened its financial market to catastrophe bonds and insurance-linked securities (ILS) in recent years, successfully supporting nine catastrophe bond issues since early 2019.

Google parent Alphabet turns to cat bonds for earthquake insurance

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Alphabet, Inc., the holding company for Google and its many units, has entered the catastrophe bond market for the first time, as the technology giant seeks $237.5 million of earthquake insurance protection that will be fully collateralized through the issuance of a Phoenician Re Ltd. (Series 2020-1)  cat bond transaction to capital market investors.

The technology giants of this world all carry significant exposure to catastrophe, severe weather and climate risks and looking to the insurance-linked securities (ILS) market as a source of efficient capacity that can support their insurance needs is a natural step for companies so focused on innovation and efficiency.

Alphabet, which acts as a holding company for all of the Google tech operations, is looking to secure California earthquake protection from the capital markets, in a deal that will see the firm’s captive insurer ceding risk to a global reinsurance firm, that will in turn enter into a coverage agreement with a special purpose insurer (SPI) Phoenician Re Ltd. which will issue the cat bond notes to investors.

中国的“一带一路”倡议会将启动亚洲的保险连结证券

2020年11月5日 Intelligent Insurer 原始采访译文。

Phoenix CRetro首席执行官基里尔·萨符拉索夫(Kirill Savrassov)认为,中国的“一带一路”倡议中的国家在很大程度上没有保险的支持,但是会将受益于该地区引入的保险连结证券。

萨符拉索夫在SIRC 2020 Re-Mind之前举行的标题为“新住所,新风险,新结构:保险连结证券另一种演变”的Intelligent Insurer 的Re/insurance Lounge网络研讨会上讲话时,他强调了在这些国家中发生的巨灾事件会对“一带一路”倡议的效率造成更广泛的影响。

他指出:《在运输和关键基础设施方面,这些国家正在获得数十亿美元的投资,但仍未投保大型自然灾害的险》。

《保护这些关键基础设施不仅对这些国家而且对作为当地区域投资者的中国都非常有利。即使在哈萨克斯坦或乌兹别克斯坦发生轻微地震,也可能导致运输走廊被堵塞》。

China’s Belt and Road Initiative could kick-start ILS in Asia

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The countries of China’s Belt and Road Initiative (BRI) are largely unsupported by insurance and would benefit from the introduction of insurance-linked securities (ILS) into the region, according to Kirill Savrassov, chief executive of Phoenix CRetro.

Speaking in an Intelligent Insurer Re/insurance Lounge webinar titled “New domiciles, new risks, new structures: another evolution for ILS”, which took place ahead of SIRC 2020 Re-Mind, Savrassov highlighted how a cat event in one of those countries could cause wider repercussions for the delivery of the BRI.

“Those countries are receiving billions and billions of investment into their transport and critical infrastructure but remain uninsured and uncovered for large natural disasters,” he said.

政府和机构指望巨灾债券

阅读英文原件。

“债券”一词具有某种魔力,因为其与我们生活的各个方面都息息相关。但是在商业世界中,债券作为金融工具,由政府和机构用于应对压力时期的资金困难。全世界的企业都从新冠肺炎大流行的影响中解脱出来的这个明显的时刻,是空前未有的。

当我的老朋友印度南部城市班加罗尔的独立分析师奈尔(T.B. Nair)告诉我巨灾债券在全球市场中逐渐普及时,引起了我对该题目的兴趣。奈尔提到了,巨灾债券正在成为一些国家确保大型跨国基础设施项目免于自然灾害的首选工具。他甚至继续提出,巨灾债券对印度克服旋风、洪水等造成的经济困难将大有帮助。

巨灾债券是结构性证券,可让保险单位将风险转移至资本投资者。换而言之,保险单位利用债券支付投资者承担重大风险,例如由于最大的地震和飓风造成的巨大损失。

据新华社报道,中国已经在加快建立巨灾保险制度的工作,以保护生命和财产免受地震,洪水和飓风等自然灾害的损失。2015年,中再集团在国际市场上发行了5,000万美元的巨灾债券,以投保国内地震造成的风险。中再集团声明,该发行通过利用资本市场帮助建立了巨灾保险的多元化风险分担机制。

ILS increasingly attractive in the face of COVID-19

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As an asset class that is uncorrelated with financial markets, provides environmental, social and corporate governance (ESG) advantages and offers good returns in the current low interest environment, insurance-linked securities (ILS) are becoming increasingly attractive, Kirill Savrassov, an ILS and sovereign risk transfer specialist, told Baden-Baden Today.

ILS activity is gaining momentum because COVID-19 has highlighted the benefits of investing in an asset class that is uncorrelated with financial markets, said Savrassov.

“Another important point is that uncorrelation, together with current price increases in the reinsurance market, is making this asset class not only attractive but also reasonably priced, with good returns,” he said.

Governments and institutions bet big on CAT bonds

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There is something magical about the word bonds as it is closely linked with all facets of our life. But in the world of business, bonds are financial instruments that are used by governments and institutions to tide over funding difficulties in times of stress. And at no other time has it been more pronounced than at this juncture when businesses all over the world are reeling from the impact of the COVID-19 pandemic.

My interest in the topic was aroused when my old friend T.B.Nair, an independent analyst in the southern Indian city of Bengaluru, told me about how catastrophe bonds are gaining ground in the global marketplace. Nair told me that catastrophe bonds or CAT bonds are now becoming the instrument of choice for several countries to insure big transnational infrastructure projects from natural disasters. He even went on to suggest that CAT bonds would have been of great help for India to overcome the economic hardships arising from cyclones, floods etc.

Congress should bring ILS issuance onshore to the U.S. – Syroka, Fermat

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The United States Congress has been urged to consider making it more attractive to issue insurance-linked securities (ILS) onshore, as this would make it easier for public and private entities in the country to access the capital markets for risk transfer, Joanna Syroka of Fermat Capital Management has said in testimony.

Speaking to the Select Committee on the Climate Crisis of the U.S. Congress earlier this month, Syroka explained that the generally offshore nature of the ILS market can make it challenging for certain types of sponsors to access the market and utilise instruments such as catastrophe bonds for insurance or reinsurance capacity.

She also explained that there are clear benefits for the United States Government were it to foster an onshore marketplace for insurance-linked securities (ILS).