March 2010/1

Ratings agency Standard & Poor's (S&P) has allocated a preliminary rating of BB+ to State Farm's Merna Re II transaction, Trading Risk understands.

Swiss Re has priced three of the original four tranches of its latest Successor cat bond, offering the reinsurer $120mn of multi peril cover over three years at less than original price guidance, Trading Risk can reveal.

State Farm is in the final stages of a $400mn-$700mn cat bond issuance that would partially replace the soon-to-mature Merna Re transaction, Trading Risk understands.

Ulrich Wallin, CEO of Hannover Re has predicted that the longevity risk transfer market will be key to growth for property and casualty reinsurers.

Beefed up capital requirements due to come in with Solvency II will make the insurance industry less not more stable according to European insurance and reinsurance trade body, the CEA.

Bermudian ILS investment manager Nephila Capital sourced investment totalling $340mn from UK pension funds in the second half of 2009.

Munich Re, Swiss Re and Hannover Re have estimated combined losses of more than EUR1bn from the Chilean earthquake and windstorm Xynthia that struck on 27 and 28 February.

The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has formed a partnership with the UN Economic Commission for Latin America and the Caribbean (UNECLAC) to coordinate disaster reporting to the area's governments.

Securis Investment Partners has agreed that JP Morgan will market its flagship Securis 1 fund.

US weather speciality insurer Vortex Insurance Agency has launched a parametric drought insurance product for US agricultural firms.

Full-year results to date for 2009 show a year of solid recovery for the (re)insurance industry, with strong underwriting performance and a return to profit.

UK regulator the Financial Services Authority (FSA) delivered a stern warning to the life settlements market about mis-selling risks to retail investors, while the American Council of Life Insurers (ACLI) has called for a ban on life settlement securitisation - raising concerns about the industry's growth and development.

Ratings agency Standard & Poor's (S&P) has affirmed that Swiss Re's 2007 Crystal Credit bond is on course to default.

Hannover Re has completed a $500mn letter of credit facility with Deutsche Bank to support further expansion into the US life reinsurance sector.

Bermudian reinsurer RenaissanceRe expects an increase in capital markets products to pose a growing threat to traditional reinsurance in 2010.

Investment bank Goldman Sachs has completed its wholesale withdrawal from the life settlements (LS) market by closing its Longmore Capital life policy-sourcing vehicle to new business and selling down its stake in joint venture trading platform Institutional Life Services (ILS).

The Perils European industry loss index is facing its first live loss assessment since its launch in December last year, as it races to collate loss data from last month's European Windstorm Xynthia.

Industry loss warranty (ILW) brokers have experienced a rise in demand for ILW cover outside of the peak zones after the magnitude 8.8 earthquake that rocked Chile on 27 February.

The Chicago Mercantile Exchange (CME) and Insurance Futures Exchange Services (IFEX) are believed to be in talks with risk transformer vehicles to offer exchange-traded insurance derivatives in (re)insurance form.

Construction company Aggregate Industries has become the latest UK corporation to hedge its pension longevity risk, in two deals worth £300mn, with Pension Insurance Corporation (PIC).

Investment bank UBS is believed to be structuring a $500mn+ life insurance securitisation, joining the ranks of banks profiting from the market's resurgence in the wake of the global financial crisis.

Life settlement market pioneer The Coventry Group has formed a strategic partnership with Traymar Capital - the investment management platform of ex-RBS executives Henry Kus and Bjorn Schmolk.

Goldman Sachs is offering up to $200mn of its holding in Unum Group's $800mn Northwind embedded value life securitisation for sale in the secondary market at an approximate 20 percent discount to par.

Swiss Re has launched four new tranches of its long-running Successor series of cat bonds, including one European wind tranche triggered by untested industry loss index Perils.

The Royal Bank of Scotland (RBS) and US broker-dealer Guggenheim Securities are both planning to launch transformer vehicles in Bermuda.