Lloyd’s should embrace ILS to secure its future: Tokio Marine Kiln CUO


Insurance, reinsurance companies and syndicates trading in the Lloyd’s of London market should leverage ILS capital and insurance-linked securities (ILS) as just one of a range of sources of capital, in order to secure their futures, according to Paul Culham, Group Chief Underwriting Officer at Tokio Marine Kiln.

In an article, Culham explains that the time to embrace ILS and alternative capital is now, for Lloyd’s players, as the capital source should just be considered another conventional backer of underwriting businesses.

Culham begins by explaining that Lloyd’s players are already actively using ILS capital, with a number of managing agents having launched what are essentially sidecar vehicles (often special purpose syndicates) funded by ILS capital.

Bridging the protection gap in Eastern Europe


For some families living in the former industrial regions of Eastern European countries, the social welfare payments offered by the Government are the most expected moment, each and every month. They are most helpful as a survival tool but, at the same time, combined with insufficient or even sometimes inexistent state-driven programs for tackling these issues, are considered by experts as a factor against actual change in both mentalities and lives.

Beside the subsistence funds coming from welfare, the same people theoretically benefit from public health insurance schemes and, at least in one country – even from a mandatory household insurance. In practice however, things are not always what they seem to be. There is however, in most Eastern European countries, an enormous protection gap, experts tend to agree, between the bottom layer of Government assistance and the upper one consisting of traditional insurance – unaffordable in these cases.

Brexit and emerging markets an opportunity for London: Nicolas Aubert


Chair of the London Market Group (LMG) and Head of Great Britain at Willis Towers Watson, Nicolas Aubert, says London insurers and reinsurers should focus on the opportunities presented by Brexit and feels the London market can thrive in emerging parts of the world, in an interview with the Boston Consulting Group (BCG).

A report by the BCG and the LMG, recently highlighted the competitiveness of the global insurance and reinsurance industry in today’s fast-paced, constantly changing risk transfer landscape. The report explored London’s position in the global re/insurance sector, and found that while the market maintained its share of global premiums, in emerging markets, London was falling behind other parts of the world.

Cat bonds an attractive asset for EU insurers in a Solvency II world


Investing in catastrophe bonds is viewed as an attractive investment by some primary insurance companies, with the implementation of Solvency II meaning the assets can have certain capital benefits, depending on an insurers profile.

For a primary insurance firm which does not carry too much catastrophe risk on its balance-sheet, an investment in pure catastrophe risk can be seen as an attractive proposition, as under the Solvency II rules for capital requirements can mean that cat bonds do not attract a significant capital charge.

This isn’t true everywhere, of course. There have always been issues for German insurers that wanted to invest in catastrophe bonds and other insurance-linked securities (ILS), with the regulators taking a particularly conservative line here.

Insurance and reinsurance companies used to provide a significant portion of ILS capital, investing in assets which were deemed to help with the overall diversification of the balance-sheet, but in recent years that trend has slowed.


ABILS pentru societatile de asigurare din Europa Centrala si de Est in calitate de potentiali investitori


by Kirill SAVRASSOV, Senior Vice-President & CEO Phoenix CRetro Reinsurance Company

Asa cum s-a mentionat in cadrul unui articol recent din industrie, “in timp ce in ultimii ani principala prioritate a investitorilor a fost identificarea de randament, anul trecut prioritatea a devenit protejarea capitalului. Un instrument care promite sa livreze atat venituri financiare, cat si decorelarea fata de pietele financiare mai largi este titlul de valoare legat de asigurari (ILS – insuranc- linked securities)”.


Solvency II equivalence brings certainty for Bermuda re/insurers: Timetric


Ever since Bermuda gained Solvency II-equivalence, commercial re/insurers and insurance groups have not been deprived when competing for and underwriting business in Europe, according to a report by Timetric.

Bermuda was designated as Solvency II-equivalent by the European Commission on March 24 2016, and according to the report Bermudian commercial reinsurers face a future of certainty in the market.

According to the report, the Bermuda insurance industry has improved partly due to the role captive re/insurance businesses have played in its development.


Twelve Capital anchor investor in €50m insurance private debt deal


Insurance and reinsurance linked investment manager Twelve Capital has acted as anchor investor for a new EUR50m insurance private debt transaction, as the firm continues to provide its investors with access to insurance-linked returns across the balance-sheet.

Twelve Capital offers a range of insurance-linked investment strategies, from catastrophe bonds, to private ILS and collateralized reinsurance, insurance private debt and private equity, through which its investors can access the returns of the insurance and reinsurance market, across the full balance-sheet.

Today the firm has announced a new private debt deal, acting as anchor investors in a €50 million transaction with Solvenian insurance firm Adriatic Slovenica d.d., providing it with an efficient source of Solvency II compliant capital for a ten-year term.


Collateralised reinsurance & ILS could hit $160bn by 2020: LGT’s Stahel


The insurance-linked securities (ILS) and collateralised reinsurance market could more than double in size by 2020, growing from the roughly $70 billion of capacity it provides today, to as much as $160 billion, according to LGT’s Michael Stahel.

Writing in a newly released report, Michael Stahel, Partner at LGT ILS Partners Ltd. the insurance and reinsurance linked investment specialist unit of private banking group LGT, forecasts that the ILS market may outstrip overall catastrophe reinsurance market, resulting in an increasing market share for the collateralised reinsurance product.

Bermuda flag

Certain aspects of ABILS for insurance companies in CEE region as potential investors


As mentioned in one of the recent industry articles: “While in recent years the main priority for investors was finding yield, last year the focus turned to preserving capital. One asset class that promises to deliver both good income and decorrelation from the wider financial markets is insurance-linked securities (ILS)”.

In a nutshell, ILS is a way for (re-)insurers and specialist ILS Funds to hedge an unwanted risk of a really major (especially when it comes to Industry Loss Warranties), but unlikely catastrophe that could jeopardize a company’s continued survival or profitability, while conscious investors are in a position to take this risk and therefore work with a pure transaction unlike insurance debt/equity, which bundles with operational, credit, market, and other issues.


Solvency II Equivalence FAQs – April 2016



What is Solvency II?

The aim of any solvency regime or system is to ensure a company is able they fall due – essentially, to guarantee a company’s assets can provide for long-term financial stability.

The Solvency II Directive (Solvency II) is a harmonised framework aimed at ensuring there is a single market, utilising a single set of rules for insurance services. The requirements under Solvency II apply to (re)insurance companies and European Union (EU) insurance groups operating in the EU with the exception of those (re)insurers covered under Article 4 of the Directive. These (re)insurers and groups are now required to comply with requirements under Solvency II, effective 1st January 2016.

Solvency II aims to ensure (re)insurers including catastrophic events and adversely affect their books of business and claims-paying abilities. Solvency II encompasses requirements surrounding risk sensitive solvency, governance and risk management, and public disclosures.