Alphabet’s (Google’s) first catastrophe bond priced on-target at $237.5m


The first catastrophe bond to be sponsored directly for the benefit of Alphabet, Inc., the holding company for Google and its many units, has now been priced on-target at the mid-point of guidance, while the Phoenician Re Ltd. (Series 2020-1)  cat bond transaction will close at the same $237.5 million size it launched at.

Alphabet, which acts as a holding company for all of the Google tech operations, entered the catastrophe bond market for the first time earlier this month, seeking a capital markets backed solution to secure more earthquake insurance protection for its assets in the state of California.

The technology giants, such as Google, Amazon, Facebook and Microsoft, among others, all carry significant exposure to catastrophe, severe weather and climate risks on their books.

The Case for Deploying Enterprise Architecture in ILS


Does innovation receive the attention it deserves in your company? Are you able to scale your business? Do you have business ideas but don’t see how IT can support or enable them? If so, this article is definitely for you!

ILS managers are technology companies that happen to work at the intersection of (re)insurance and capital markets. Such a statement is increasingly adopted by companies seeing innovation as a key driver of their comparative advantage. Whether this involves creating new business products or business models, innovation and technology must be central to strategy and managed as a fundamental capability.

To gain such a competitive edge, ILS managers need a front-footed, strategically aligned innovation and technology organization. In reality, however, many lack such an organization, and experience significant challenges in their IT architecture that detract from the desired strategy instead of reinforcing or even shaping it. What is needed is the capability to manage the company’s IT assets and drive the discovery and adoption of innovative solutions that advance the business strategy.

Google parent Alphabet turns to cat bonds for earthquake insurance


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.

Lloyd’s launches ‘first of its kind’ parametric BI cover for SMEs


Lloyd’s has launched a new business interruption policy, which it believes is the “first of its kind” parametric solution designed to protect small and medium sized enterprises (SMEs) against IT disruption or downtime.

The new policy pays out automatically once a company’s IT services – such as cloud, e-commerce or payment systems – are disrupted, reducing the time insurers spend assessing a loss or adjusting a claim.

The product is led by Tokio Marine Kiln (TMK) and supported by other members of Lloyd’s Product Innovation Facility including RenaissanceRe.

“We are thrilled to launch the first ‘off-the-shelf’ parametric insurance product for IT downtime. This is a great milestone for us and we are grateful to TMK, Howden and Lloyd’s Product Innovation Facility for helping us to develop our product and providing us with valuable insights and support along the way,” said Yonatan Hatzor, co-founder and CEO of Parametrix Insurance.

Insurtech: slogan, bubble or revolution?


The re/insurance world has been grappling with the possibilities posed by insurtech for some years, but is it just a slogan, or a bubble that will burst, or is there something more tangible emerging? Bermuda:Re+ILS investigates.

Insurtech is a word that gets a lot of people very excited, as a possible game-changer for the re/insurance industry. Indeed, the use and benefits of technology in the world of re/insurance have been mooted for many years.

There have been several false dawns in places such as Lloyd’s, as innovation came up against tradition, but recent developments have seen more optimism about technology’s use in the market.

Insurtech and technological advances offer growth opportunities for the global mutual insurance sector


Representatives of A.M. Best presented a macro view of all the technological advances that will likely have a significant impact on the global insurance industry during “The next 25 years in insurance” webinar organized, at the end of March, by ICMIF – International Cooperative and Mutual Insurance Federation.

Talking about the potential disruption brought by technology, Andrea KEENAN, Senior Managing Director, Industry Relations, A.M. Best exaplained that, contrary to the general belief, “so many Insurtech have technology that is meant to enable insurance company, not disrupt them. Some companies have very clever underwriting techniques and some of them might become carriers themselves. The biggest disruption is happening at the intermediary phase: new underwriting services, new claims services. The insurance companies really have to look into these new technologies and pay attention to the cost savings that their competitors are going to be taking on.”

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.

Insurtech funding surges in 2018 as key players expand: Deutsche Bank


Insurtech investment volumes increased by more than 60% between 2017 and 2018, while key players such as Lemonade and Amazon also expanded their operations over the year, according to analysts at Deutsche Bank.

Deutsche Bank data shows that insurtech investments (across all stages) totalled US $2.6 billion during the first three quarters of 2018, compared with $1.6 billion for the same period in the previous year.

This equated to an average $14 million investment per deal for the 184 deals transacted in 2018, versus $10 million per deal for the 152 recorded in 2017.

Ledger closes non-standard auto insurance securitization with AlphaCat


Insurance technology (insurtech) and insurance-linked securities (ILS) start-up Ledger Investing has successfully completed its first transaction, directly securitizing a portfolio of non-standard passenger auto insurance between an MGA and the AIG-owned ILS fund manager AlphaCat.

The transaction is a step away from the more typical property catastrophe risk exposures that are securitized for ILS funds and ILS investors, but Ledger had always hoped to expand the securitization of insurance risk outside of typical classes of business in an effort to broaden the market.

This first transaction saw Ledger Capital Markets (LCM), the broker-dealer entity of Ledger Investing, acting as the structurer and bookrunner for a bilateral ILS transaction between an MGA arm of AmWINS, as the originator of the risk, and AIG-owned specialist insurance-linked fund manager AlphaCat Managers Ltd. as the ILS investor on behalf of one of its fund strategies.

Blockchain’s future in insurance takes shape


The re/insurance industry holds high expectations for blockchain technology as an opportunity to increase efficiency of insurance processes, and the future is beginning to take shape with the launch of new platforms and products. Intelligent Insurer reports.

Blockchain, also dubbed distributed ledger technology, is the technology behind digital currencies such as Bitcoin and is praised for the fact that it creates a secure ledger of information that prevents the unauthorised modification, addition or removal of data.

As blockchain systems are immutable and do not require oversight by a central authority, one of the advantages of this technology is that it opens up new options for secure collaboration between competitors by removing the need for trust between third party organisations.