ILWs
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Typical ILW attachment points for US peak perils have fallen from $60bn to $40bn-$50bn as the market awaits the final Hurricane Ian number from PCS.
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The investment firm said cat bond spreads that are elevated relative to historical levels continue to offer an attractive entry point for investors.
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The deal was brokered by Gallagher Re and provides US cyber insurance event protection.
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In its semi-annual report for the six months to 31 July 2023, the manager said the fund had returned 2.74% over the half-year.
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The bond provides coverage for North America storms and earthquakes, as well as European windstorms.
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The Swiss direct risk transfer platform will use the funds to help grow its team and develop products.
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For larger top-end ILW triggers, cedants may have to be pragmatic on rolling over capital.
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The 1 June renewal posed challenges for Florida insurers seeking reinsurance cover.
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Rates have climbed 20%-35% since 1 January, and 40%-50% year on year, sources estimated.
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Despite a move away from non-official indices, global ILW trading is still sometimes relying on a patchwork of triggers.
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There is a lack of capacity for aggregate deals, and moves towards more named peril coverage.
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The ILW-focused fund has continued expanding after generating 6.4% returns last year.
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As the renewal is expected to spill over into 2022, the two-speed market will put pressure on retro-reliant carriers.
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The listed mutual fund will be overseen by new recruit Niall MacGillivray.
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One market participant said the strategy was $250mn in size, but it is not known how much business it has so far written.
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The reporting agency for industry loss triggers has been expanding territories and natural peril coverage over time.
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Sources told Trading Risk that a different kind of investor was interested in ILWs compared with retro cat bonds.
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Richard Anson previously served as head of ceded reinsurance at Antares and reinsurance manager for Aviva.
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There is little sign of retro demand returning after buyers cut back in January.
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The worldwide aggregate ILW bond covers an unusually wide range of perils for the cat bond sector.
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The former Bermuda Brokers and JLT Re broker says ILW appetite is expected to remain strong after benefitting from pandemic trading activity.
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The transaction takes total private cat bond issuance tracked by Trading Risk to $461mn for the year, outstripping 2020 totals.
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The Bermuda (re)insurance firm will pay a final spread on the deal of 675 basis points (bps).
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The manager says cedant demand is growing for larger transactions.
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The firm has seen interest in non-named storm covers after last year's derecho and other loss events.
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The investment bank is focused on developing new parametric products for the reinsurance market.
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US contracts are still pricing at a 10%-15% premium to January 2020 levels, but excess retro capacity may impact the smaller market.
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Net assets have grown 5% year-on-year to $876mn as of 31 October 2020.
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Target investments could include cat bonds and other reinsurance, though the allocation size is unknown.
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The fund also grew its net assets by 15% to about $142mn.
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The start-up will run three auctions on Tuesday ahead of Hurricane Sally reaching the US coast.
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Total equity and debt raised this year if the $300mn target is reached would approach $1.5bn.
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ILWs at the $10bn mark failed to clear, as auction participants suggested losses would not reach the trigger.
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Buyers and sellers are eyeing a 20% RoL, but contracts have yet to trade.
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Buyers are looking to protect against a mid-sized loss, although trades are not believed to have taken place yet.
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The $3.9mn claim followed an August revision to the PCS Irma loss estimate.
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