July 2012/1

As Hurricane Isaac bears down on Louisiana, interest in livecat trading has focused on the state insurer's $125mn Pelican Re cat bond, however trading activity has been far lower than during last year's Hurricane Irene when Johnston Re was in the line of the storm, Trading Risk understands.

Tropical storm Isaac has been upgraded to hurricane strength as it approaches New Orleans in what will be the city's first test of its rebuilt flood defences since Hurricane Katrina.

The capital markets are providing an increasingly viable alternative to traditional reinsurance but falling property cat rates may see demand fall next year, according to Fitch Ratings.

Hannover Re is aiming to renew its European windstorm bond Eurus, according to a pre-sale note from Standard & Poor's

Hurricane Isaac is on track to be the first US landfalling hurricane of 2012, and is drawing parallels with the Hurricane Katrina disaster of 2005 as it heads towards New Orleans

Chicago-based ILS fund manager Elementum Advisors has signed up two executives to new roles which the firm says will significantly strengthen the depth of its legal and operational infrastructure.

Florida state insurer Citizens Property Insurance estimates that it saved nearly $50mn and gained "staggering" benefits on its 2012 reinsurance spend as it came out fighting to defend its spending on travel.

Third Point Re hopes to launch its planned property cat sidecar ahead of the 1 January renewals next year as it prepares to seek third party capital for the off-balance sheet vehicle, sister publication The Insurance Insider reported today.

London-listed collateralised retrocessionaire Catco has reported a 5.3 percent increase in net asset value to $357.9mn for the first half of the year as investment gains on its 2012 portfolio offset loss creep from 2011 catastrophes.

The $50mn unrated class C tranche of multi-peril cat bond Combine Re has not been triggered by cedant Country Mutual Insurance Company's US thunderstorm losses, sources have confirmed.

Retrocession underwriter Bryan Bumsted has joined Bermudian start-up Third Point Re to drive underwriting at the reinsurer's property catastrophe unit, which is expected to write business off balance sheet

The National Oceanic and Atmospheric Administration (NOAA) has raised its prediction for 2012 storms despite the expected transition to El Niño weather patterns, which tend to lower hurricane activity

Munich Re has completed a longevity reinsurance transaction with Pension Insurance Corporation (PIC) covering £300mn of liabilities.

The AlphaCat division at Validus contributed $12.1mn to the Bermudian reinsurer's profits in the second quarter but the firm took a $5mn quarterly loss from the new PaCRe start-up, according to the insurer's Q2 results.

It is unlikely any further Embarcadero Re California earthquake bonds will be issued this year following yesterday's closure of the latest bond in the series which raised $300mn of cover, Trading Risk understands.

Liz Frederick, global head of ILS at Kane and recently appointed managing director (MD) of Kane USA, has left the insurance manager, Trading Risk can reveal.

Willkie Farr & Gallagher associate Matthew Stern looks at the impact of US judicial decisions on the ILS market

US property catastrophe pricing showed further signs of abating at the 1 July renewals, with reinsurance rate rises cooling after a year of increases and evidence emerging of a less favourable retrocession market

Reinsurers are revising their view of the role they play in the convergence markets as they increasingly target third party funds management business, according to various commentators

The chances of an El Niño weather pattern developing and restricting hurricane activity in the Northern Hemisphere summer have increased, says the US Climate Prediction Center

Bermudian ILS manager Pillar Capital Management is set to launch a new lower risk fund as it fundraises for its first January renewal season under new management after recently rebranding from Juniperus Capital

Dexion Capital says it expects follow-on share issuances to be easier after raising just £40mn from the float of its ILS closed-ended fund DCG Iris

Second quarter gains have helped bolster performance among ILS fund managers but their first half returns are still lagging the Swiss Re Global Cat Bond Total Return index, according to results from a group of seven cat bond funds tracked by Trading Risk

The US Securities and Exchange Commission (SEC) has missed the 4 July deadline for adopting a provision of the Jobs Act that lifts a general advertising ban for private securities offerings

Bermudian start-up Mercury Capital has done its second cat bond ‘lite' deal through a $35bn US wind industry loss warranty (ILW)

Broker dealer Lane Financial estimated that average premiums in the ILS and industry loss warranty (ILW) market dropped 10 percent during the second quarter

Secondary cat bond pricing has begun levelling out after an uptick that began in early June, when high demand for bonds pushed up prices, as 2012 vintage bonds continue to price above par

An inflow of investors into the private bond market allowed broker Towers Watson Capital Markets (TWCM) to double the size of the Oak Leaf Re cat bond it placed from $11.95mn last year to $22.78mn

ILS spreads continued to slide in early July as primary cat bond issuance dried up with the onset of the US hurricane season, enabling Munich Re's latest Queen Street offering to price below forecast guidance

Two cat bond funds closed their doors to new subscriptions this month, but this is not necessarily a sign of a wider issue with excess capacity, market observers said

It was lovely to catch up with so many of our readers at the Trading Risk awards just a few weeks ago - I hope you all enjoyed yourselves as much as I did

Demand for industry loss warranty (ILW) protection has slumped, according to a variety of brokers, after indemnity protection proved to be in abundant supply at the mid-year renewals

SAC Re CEO Simon Burton says the key to the firm's successful fundraising has been repackaging its combination of (re)insurance and investment risk to appeal to investors dissatisfied with the currency on offer from traditional reinsurers