World Bank climate change plan highlights cat bonds & risk transfer

This week, the World Bank Group announced its new Climate Change Action Plan, with a range of commitments to ramp up and deliver record levels of climate finance, while catastrophe bonds, disaster risk financing and insurance against climate risk are also mentioned

Through its new Climate Change Action Plan, the World Bank is targeting the delivery of record levels of climate financing to developing countries.

At the same time the World Bank aims to work to reduce emissions, strengthen adaptation and align financial flows within the work it does with the goals of the Paris Agreement on climate change.

FULL ORIGINAL PUBLICATION HERE

Cat bond activity may give multi-strategy funds room to expand

The acceleration of activity in the global catastrophe bond market over the last few months could now drive an opportunity for a number of multi-strategy investment funds to expand, as the availability of paper has increased even causing some investment managers to lift the shutters on closed funds, we understand.

Which could drive more capital to look at catastrophe bonds and perhaps other insurance-linked securities (ILS), or the more structured collateralised reinsurance opportunities such as sidecars.

Given a lot of the multi-strategy investment funds that look at cat bonds and other ILS are open to retail money as well, these investment managers would really like to see listed opportunities, or assets with greater liquidity, which could even drive interest among specialist ILS managers or reinsurance firms to revisit the listed fund strategy again.

FULL ORIGINAL PUBLICATION HERE

Global insurance protection gap hit $1.4 trillion high in 2020: Swiss Re

The global insurance protection gap, or the gap between economic losses and those that are insured, widened in 2020 as pandemic related effects drove global macroeconomic resilience to decline by 18%, according to a measure by reinsurance firm Swiss Re.

Swiss Re Institute has published its Resilience Index, which shows that the COVID-19 pandemic reduced global macroeconomic resilience by close to a fifth in 2020.

Global economic growth is expected to recover strongly in 2021, after the pandemic-induced recession in 2020, thee reinsurance firm said, which it expects will help to build macroeconomic resilience again.

However, Swiss Re warns that “there will not be a return to pre-COVID-19 levels of resilience in 2021.”

FULL ORIGINAL PUBLICATION HERE

UCITS cat bond funds growing fast. Schroders overtakes GAM as largest

UCITS catastrophe bond funds as a group have increased their assets significantly over the last year, with accelerated growth of the cat bond market and rising interest in ILS investments helping to propel the UCITS cat bond funds we track to asset growth of roughly 58% in just one year.

Over that period, first place position for the largest UCITS cat bond fund has also changed, as Schroders has now overtaken GAM, after Schroders’ GAIA Cat Bond Fund overtook the GAM Star CAT Bond Fund (which is portfolio managed by Fermat Capital Management) in terms of assets held within the strategy.

At the end of May 2020, a group of 15 main UCITS cat bond funds had accumulated catastrophe bond assets of just over US $5.1 billion.

By the end of May 2021, just one year later, that figure had grown considerably, with the same 15 UCITS cat bond funds counting some US $8.05 billion of cat bond assets under their management.

FULL ORIGINAL PUBLICATION HERE

Hong Kong ILS enquiries already received from potential sponsors

It increasingly looks like Hong Kong could break into the insurance-linked securities (ILS) market before too much longer, as with details of its ILS grant pilot now available, one local law firm said it is already receiving enquiries from potential sponsors.

Back in February, Paul Chan, the Financial Secretary of Hong Kong, revealed plans for a Pilot Insurance‑linked Securities Grant Scheme that will pay as much as HK $12 million per issuance, which is close to US $1.6 million of potential ILS or catastrophe bond issuance cost savings for sponsors choosing to use Hong Kong as a domicile.

Then, in May this year, Hong Kong’s Insurance Authority (IA) published initial details of the insurance-linked securities (ILS) grant scheme.

FULL ORIGINAL PUBLICATION HERE

Cat bond growth propelled by strong investor demand: Moody’s

Moody’s has reported that the catastrophe bond market saw record issuance in 2020 despite a brief pause in Q2 following a particularly tumultuous period for the financial markets.

And looking ahead through 2021, the rating agency expects cat bond issuance to continue to grow with strong investor demand for the asset class, evidenced by a reduction in spreads and upsized deals seen over the last several quarters.

According to Moody’s future growth in the ILS market will likely be driven by pure cat bonds from traditional and non traditional sponsors as well as insurance-linked notes from mortgage insurers.

FULL ORIGINAL PUBLICATION HERE 

Franklin Templeton launches UCITS cat bond fund, managed by K2’s Malawer

Investment manager Franklin Templeton has launched a new UCITS catastrophe bond fund, which is portfolio managed by Jonathan Malawer from its hedge fund specialist manager arm K2 Advisors.

The Franklin K2 Cat Bond UCITS Fund is a Luxembourg based fund and part of the Franklin Templeton Alternatives Funds offering from the investment manager.

The new UCITS catastrophe bond fund will be widely marketed across Europe, being registered in eleven countries in total, including the UK, France, Germany and Italy.

The Franklin K2 Cat Bond UCITS Fund will be managed by K2 Advisors insurance-linked securities (ILS) and catastrophe bond lead Jonathan Malawer, Managing Director, Head of ILS, Commodities and Environmental Strategies.

FULL ORIGINAL PUBLICATION HERE

Franklin Templeton launches UCITS cat bond fund, managed by K2’s Malawer

Investment manager Franklin Templeton has launched a new UCITS catastrophe bond fund, which is portfolio managed by Jonathan Malawer from its hedge fund specialist manager arm K2 Advisors.

The Franklin K2 Cat Bond UCITS Fund is a Luxembourg based fund and part of the Franklin Templeton Alternatives Funds offering from the investment manager.

The new UCITS catastrophe bond fund will be widely marketed across Europe, being registered in eleven countries in total, including the UK, France, Germany and Italy.

The Franklin K2 Cat Bond UCITS Fund will be managed by K2 Advisors insurance-linked securities (ILS) and catastrophe bond lead Jonathan Malawer, Managing Director, Head of ILS, Commodities and Environmental Strategies.

FULL ORIGINAL PUBLICATION HERE

Cat bond growth propelled by strong investor demand: Moody’s

Moody’s has reported that the catastrophe bond market saw record issuance in 2020 despite a brief pause in Q2 following a particularly tumultuous period for the financial markets.

And looking ahead through 2021, the rating agency expects cat bond issuance to continue to grow with strong investor demand for the asset class, evidenced by a reduction in spreads and upsized deals seen over the last several quarters.

According to Moody’s future growth in the ILS market will likely be driven by pure cat bonds from traditional and non traditional sponsors as well as insurance-linked notes from mortgage insurers.

“The cat bond market has again proven resilient despite some losses and principal payouts, largely from prior period reserve development,” analysts said in a new report.

FULL ORIGINAL PUBLICATION HERE

Cat bond activity may give multi-strategy funds room to expand

The acceleration of activity in the global catastrophe bond market over the last few months could now drive an opportunity for a number of multi-strategy investment funds to expand, as the availability of paper has increased even causing some investment managers to lift the shutters on closed funds, we understand.

Which could drive more capital to look at catastrophe bonds and perhaps other insurance-linked securities (ILS), or the more structured collateralised reinsurance opportunities such as sidecars.

Given a lot of the multi-strategy investment funds that look at cat bonds and other ILS are open to retail money as well, these investment managers would really like to see listed opportunities, or assets with greater liquidity, which could even drive interest among specialist ILS managers or reinsurance firms to revisit the listed fund strategy again.

FULL ORIGINAL PUBLICATION HERE