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December 2012/1

  • Longevity swap volumes in 2012 were touted to exceed or at least match the $7bn record set in 2011, but one year on just a handful of deals have closed, with the market dominated by reinsurers.
  • The industry loss warranty (ILW) market had a year of two halves in 2012, starting with strong trading amid a dislocated retro renewal at 1 January 2012, before volumes and prices fell dramatically at mid-year as indemnity capacity rebounded.
  • Collateralised capacity made its mark in this year's property catastrophe renewals as market commentators remarked on the success of convergence.
  • Throughout 2012 reinsurers have rushed to pick up new convergence talent and build out their third party funds management arms in response to growing investor interest in the sector.
  • ILS specialist hedge funds tracked on the Eurekahedge ILS Advisers Index delivered average returns of 5 percent for 2012 up to the end of November, well ahead of the -0.12 percent annual loss made in 2011.
  • This time last year the specialist ILS fund market was abuzz with talk of potential consolidation as a question mark hung over the future of two of the largest asset managers in the sector.
  • Figures from Swiss Re show that dedicated investors bought a 62 percent share of ILS issuance in 2012, as the market continued to shift from an opportunistic to more long-term investor base.
  • The catastrophe bond market pulled ahead this year to grow outstanding volumes for the first time since the 2008/09 financial crisis, as annual issuance stayed on track to hit the $6bn volume forecast and easily surpass the 2011 total of $4.8bn.
  • RMS Paradex puts Sandy at $17.8bn; Sandy loss disclosures; Listed funds draw in institutions; ILS attracts Magnetar exec
  • The Bermudian (re)insurer Endurance's acquisition of the assets of Galileo Weather Risk Management demonstrates the weather market's maturity, according to Galileo co-founder Martin Malinow.
  • A new index fund and the third listed ILS fund are among the upcoming launches that are set to add more investor choice to the market.
  • With a $2bn-$3bn marine industry loss estimate now a significant component of the overall Sandy burden, the convergence market is looking for possible sources of loss leakage.
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