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

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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

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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.

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

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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-2019: итоги и прогнозы на 2020 год

ОРИГИНАЛЬНАЯ ПУБЛИКАЦИЯ ЗДЕСЬ

Международные инвестиции в InsurTech растут практически в геометрической прогрессии. Они уже превысили $4,4 млрд и могут достичь $6 млрд. Это почти в два раза превышает итоги 2018 года. Денис Гаврилов, директор по развитию бизнеса в страховании ИТ-компании КРОК, рассказывает, в какие технологии и компании инвесторы вкладывают такие существенные суммы, что происходит в России и чего ждать от 2020 года.

Мировая практика

По данным Willis Towers Watson, в 2019 году 239 иншуртех-компаний и проектов привлекли инвестиции в общей сумме на $4,36 млрд (около 310 млрд рублей). Лидирующим целевым рынком для привлечения инвестиций в иншуртех-проекты остаются США (с долей чуть менее 50%), за ними следует Великобритания (около 10%). Наиболее активно растут инвестиции в Китай (с 0% до порядка 10% в 2019 году).

Is the ILS market ready to tackle cyber?

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A lack of historical and contextual data continues to hinder the entry of the insurance-linked securities (ILS) market into the cyber re/insurance space, and with ‘silent’ cyber exposures adding further uncertainty, it might be easiest for the ILS sector to focus on affirmative cyber, at least to begin with.

This is according to Co-Head of Property Claim Services (PCS), Tom Johansmeyer, who recently spoke with Artemis about the ongoing and developing NotPetya cyber-attack and the potential for ILS to participate in the expanding cyber risk market.

With an economic impact of at least $10 billion, according to the White House, and insured losses of at least $3 billion, according to PCS, the NotPetya cyber catastrophe event remained mostly a property event for the first two years of development.

Re/insurers to partner with governments & capital markets on cyber risk: S&P

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Given the enormous economic loss potential associated with cyber risks, rating agency Standard & Poor’s feels it inevitable that insurance and reinsurance firms will look to both the government and capital markets to help in boosting available cyber risk capacity.

In a new report on the reinsurance market’s approach to cyber risk, S&P Global Ratings points out that the potential for cyber losses to cripple the re/insurance industry is clear, if a prudent approach to underwriting and accumulation management isn’t followed.

S&P also questions the ability of the traditional insurance and reinsurance market to deploy sufficient capacity to meet the market opportunity of cyber risk on its own, or whether that would be sensible, leading the rating agency to liken the growth of the cyber market to the catastrophe risk underwriting market after hurricane Andrew.

Cyber is a logical use of ILS capacity: Brian Duperreault, AIG CEO

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Cyber risks are a logical place for the use of insurance-linked securities (ILS) capital as there is a real need for capacity, according to Brian Duperreault, the CEO of insurance giant AIG.

Duperreault was interviewed on stage at the annual SIFMA IRLS conference in Miami, Florida yesterday.

He discussed the evolution of AIG’s own use of ILS, the development of its strategy after the acquisition of reinsurance group Validus and its specialist ILS fund manager AlphaCat Managers, as well as what that means for his insurer going forwards.

One area of interest in the discussion was Duperreault’s desire to expand the usefulness of AIG to its clients with the help of alternative capital managed by AlphaCat or accessed via other insurance-linked funds and investors.

Blockchain’s future in insurance takes shape

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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.

Blockchain smart contracts unlikely to replace traditional processes: Solidum

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The nuanced complexity of a re/insurance contract makes it an unrealistic candidate for replacement by blockchain smart contracts, according to independent investment management firm Solidum Partners.

A smart contract is essentially an immutable piece of code embedded into the blockchain that can execute binary decisions such as the automatic transfer of value from one account to another.

Insurtech-Led Change in the Lloyd’s market

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Over the last eighteen months, InsurTech has moved beyond being seen as a hostile entrant into the general insurance landscape and has become synonymous with innovation activity throughout the industry. Moreover, the impact of innovation is now being felt in the core business and by customers, and not only in limited experiments in segregated hubs and labs.

Within many Lloyd’s managing agents there is growing evidence of collaborative innovation as insurers buy, borrow and build the capabilities required to compete in a changing landscape. We have seen the creation of innovation teams, appointments in areas such as artificial intelligence and blockchain and the creation of new roles such as Chief Data Officers, Digital Officers and Heads of Innovation.

But what does this all mean?

We believe that this activity is evidence that innovation through new technology and data is becoming the norm, but little has been written about the impact specifically on the specialty market. That is why the LMA asked Oxbow Partners to explain why and how InsurTech is now relevant for corporate & specialty insurers and reinsurers and to provide some strategic ‘guiderails’ to help managing agents develop their response.

We hope you find the report useful.

Tom Payne Director of Market Operations LMA