April 2015/1

Spinnaker Insurance Company, the proposed $50mn insurer led by former Arch Re executive Dave Ingrey, is planning to imitate State National's success in the fronting market by offering capacity to reinsurers seeking access to the primary US catastrophe market.

Tony Ursano is set to re-emerge at reinsurance broker TigerRisk following his departure from Willis Capital Markets & Advisory

What does "sensitivity case" modelling imply for quake risk?

Insurance companies interested in issuing private placement catastrophe bonds offered under Section 4(a)(2) of the Securities Act may benefit from streamlining the structure of a bond, but they must be careful not to strip away important structural elements for capital markets risk transfer.

Omers to buy up to 29.9% of Brit; ABR Re launched at $800mn; Fidelis targets hybrid model; Hilti questions ILS expansion; Sola and Pennay platform live; Nephila to write $200mn premium; Below-average hurricane season forecast; Syndicate 2357 boosts premiums; Niklas costliest Q1 cat; Industrial loss index potential; Alternative backers for Icat SPS; Hannover Re lists $3.75mn lite bond; Refocus on risk mitigation

Florida's State Board of Administration (SBA) has approved the state's cat fund and its broker Aon Benfield to go ahead with a $1bn risk transfer to the private reinsurance market at prices that are heading to "historic lows".

Axis president and CEO Albert Benchimol said his firm was "fully committed" to a merger with PartnerRe after Exor made a rival proposal 15.8 percent higher than its bid.

Reinsurance remained the key earnings driver for (re)insurance carriers in 2014 even as many chased growth in the specialty insurance market, where rates are under less competitive pressure.

There is uncertainty over the role reinsurance sidecars will play in the long term, according to Nephila's business development director Adam Beatty.

Stone Ridge Asset Management earned a 4.5 percent average return from its continuing sidecar investments in the three months from November 2014 to January 2015, according to Trading Risk records.

Swedish pension funds dial up ILS; Vloedman launches ILS manager

A basket of seven cat bond-only funds tracked by Trading Risk has generated an average return of 0.25 percent for the first quarter, plunging from the Q1 2014 figure of 1.01 percent.

The first quarter of 2015 saw a slight hardening of rates on the ILS market, in contrast to the same period last year.

The secondary ILS market cleared a new record-sized trade of the $1.5bn Everglades 2014-1 cat bond in March, sources told Trading Risk.

The residual insurance pools for the states of Texas and Massachusetts have both returned to the cat bond market with new transactions ahead of the 2015 hurricane season.

Cat bond issuance in the first quarter of 2015 hit a record $1.86bn, rising 21 percent year-on-year to comfortably beat the $1.54bn placed in Q1 2014, according to Trading Risk records.

Allstate's seven-year Sanders Re bond has been quietly dropped from the subscription market, making it the second ILS deal to be rejected by investors since a Queen Street offering from Munich Re last year, Trading Risk understands.

The New Zealand Superannuation Fund remains a "fan" of the ILS asset class even at current rating levels, but has reduced its exposure as it waits to see if market softening is a permanent trend, according to its head of investment analysis David Rae.

It's no surprise that participants in the reinsurance industry fight for the power to narrate what is going on in the market.

Endurance chief financial officer Michael McGuire said that the company is likely to focus on ceding quota share business to Blue Capital, the third-party funds platform owned by Montpelier Re, after closing its $1.83bn acquisition of the reinsurer.

AQR's decision to shut its Bermudian reinsurance platform highlights the increasing scale needed to to compete in the ILS funds market, however commentators have said this will not necessarily spur consolidation in the sector.

Florida Citizens Property Insurance is seeking $250mn for its Everglades Re 2015 cat bond, Trading Risk understands