Insurance
ILS, an asset class whose tailwinds are not economy-dependent
Regular readers will know that we’re proponents of investing in insurance-linked securities (ILS) and reinsurance linked assets, recognising the beneficial features of the ILS asset class and what it can offer to a sophisticated institutional investor. Among these are, of course, the relatively stable returns that can be achieved over the longer-term (strategy dependent and…
Read MoreLatest report shows surprising job gains for the insurance industry
By Dr. Steven Weisbart, Chief Economist, Insurance Information Institute The employment report for May 2020, just released by the U.S. Bureau of Labor Statistics, has some surprising numbers. I’m not referring to the national employment or unemployment numbers (although they are surprising) but to the employment numbers for April for the insurance industry. In April,…
Read MoreParametric (flood & surge) cat bonds can benefit (mortgage) investors
Investors and funds with exposure to mortgage risks are carrying in some cases significant amounts of flood and storm surge risk exposure that is not covered by insurance and has not been transferred, presenting a potential opportunity for parametric risk transfer structures and perhaps catastrophe bonds or ILS. A landmark catastrophe bond transaction from earlier…
Read MoreILS the main catastrophe price driver, but to “hold the line” on returns: A.M. Best
Third-party reinsurance capital, flowing in from the insurance-linked securities (ILS) market and other sources, is now the main driver of property catastrophe pricing, according to A.M. Best who expects investors to “hold the line” on returns. The growing size of the ILS market and alternative sources of reinsurance capital over the last decade has seen…
Read MoreCat bonds more attractive, a prudent buy for retro: Albertini, Leadenhall
During a period of broad financial market dislocation, the catastrophe bond space continues to exhibit resilience, and in the current operating landscape, the attractiveness of the asset class is enhanced, according to Luca Albertini of Leadenhall Capital Partners LLP. Primary catastrophe bond issuance has rebounded after a halt caused a slower start to the second-quarter…
Read MoreFedNat adds aggregate cover to $1.9bn renewal, cites more restrictive terms
U.S. primary insurance carrier group FedNat Holding Company has successfully secured around $1.9 billion of reinsurance protection for its subsidiaries, but cited hardening rates and “more restrictive” terms from markets at the renewals. FedNat has again purchased slightly more protection, taking its catastrophe excess of loss reinsurance coverage up to $1.9 billion, with single events…
Read MoreInsurers respond to COVID-19 (6/05/2020)
With a number of carriers increasing the credit they are giving on their policies, U.S. auto insurers will return over $14 billion to their customers nationwide in response to reduced driving during the pandemic, according to an Insurance Information Institute (Triple-I) estimate. In May, Triple-I estimated that insurers would return more than $10 billion. Since then a…
Read MoreHurricane season forecast “very” active, with high landfall probability
The latest forecast updates for the 2020 Atlantic tropical storm and hurricane season continue to point to elevated chances of a particularly active year, with Colorado State University saying we should expect it to be “very” active, with above average landfall probabilities as well. The latest forecasts from two of the best connected teams, Colorado…
Read MoreTWIA hits $2.1bn reinsurance renewal target, thanks to upsized cat bond
The Texas Windstorm Insurance Association (TWIA) has successfully secured the $2.1 billion of reinsurance protection it was targeting for the 2020 storm season, with its new catastrophe bond and its doubling in size a key piece of the renewal for the residual market insurer. As we explained before, TWIA had been aiming to have $4.2…
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