November 2013/1

RenaissanceRe's DaVinci Re sidecar made a $65.2mn profit during the third quarter of 2013, down 12 percent from the $74.2mn reported in the same period last year.

AlphaCat Managers reported an $11.9mn underwriting profit for the third quarter, down from $27.6mn for the same period last year, due partly to the fact that the reinsurer did not renew its Florida sidecar.

Scor ceded EUR176mn of P&C claims to retro providers in the nine months to 30 September, almost 50 percent ahead of the EUR118mn transferred in the prior-year period.

Hannover Re ceded a lower proportion of its catastrophe losses to retrocessionaires in the first nine months of 2013 compared to the same period last year, but has still passed greater overall losses to its counterparties.

Lancashire expects the collateralised reinsurance market to expand from $40bn-$45bn at present to $65bn in the next 12-24 months, the company said on a third quarter earnings call.

Hiscox elbowed its way up the ranks of reinsurer ILS managers when it announced during the third quarter reporting season that it expected to deploy $200mn of third-party capital in 2014.

Aon Benfield Securities president Paul Schultz said that the alternative reinsurance market would have to "grow past" modelled risk as he predicted that $100bn of new capital would enter the market over the next five years.

AIG's chief reinsurance buyer Samir Shah has suggested that ILS sponsors could play a greater role in modelling their own cat bond transactions, but some broker-dealers expressed reservations about the idea to Trading Risk.

It is inevitable that ILS managers will ramp up their use of leverage as spreads compress, Fermat Capital co-founder John Seo said at the Trading Risk New York Rendez-Vous.

US terrorism and US and Asian flood risk are areas where the ILS market could be "first to the party" to help solve a double whammy of environmental and economic problems, RMS managing director Peter Nakada said at the Trading Risk New York Rendez-Vous.

Florida Citizens Property Insurance shook up the ILS 'club' with its debut Everglades Re cat bond as demand from institutional investors drove the deal up to a massive $750mn, Nephila co-founder Frank Majors said.

The next wave of ILS investors could emerge from a different source than the pension fund capital that has backed its development, according to speakers at the Trading Risk New York Rendez-Vous last month.

Willis Re has predicted that European property cat rates will drop 5-10 percent on average for loss-free accounts at the 1 January 2014 renewals.

A crucial question for the convergence market over the next quarter is whether demand for cat bonds or collateralised reinsurance will take the lead as some investors retreat from "ruthless" pricing conditions on the ILS market, according to Willis Capital Markets & Advisory (WCMA).

Steven Cohen's hedge fund SAC Capital Advisors and several associated companies agreed to shut down their operations as investment advisers in a $1.8bn settlement with US prosecutors over insider trading charges.

Guy Carpenter has brought together a consortium of Bermudian and London reinsurers willing to offer broad cover to US mutual insurers, sister publication The Insurance Insider has reported.

Axa and AIG are seeking to place significant new aggregate catastrophe covers for 2014 as cedant demand for such "sideways" protection continues, sister publication The Insurance Insider reported last month.

London-listed ILS fund DCG Iris raised £7.7mn from a new issuance of shares at 100.54p per share, which will take the fund's market capitalisation to £68.7mn.

The RBS Group Pension Fund expanded its reinsurance-linked assets by more than a third in the year to 31 March 2013 to reach £527mn, according to its latest set of financial results.

UK-listed asset manager Schroders has launched a new cat bond fund on its UCITS platform.

Stone Ridge Asset Management has lifted its initial target for a new closed-ended reinsurance fund to $600mn from $500mn, thereby increasing the maximum size of the fund to $1.1bn, Securities and Exchange Commission filings show.

Scandinavian hedge fund executive Robert Lindblom is hoping to set up Sweden's first ILS fund by the second quarter of 2014.

Private equity firm Aquiline Capital Partners has sold its stake in Pillar Capital Management, although it retains an investment in funds managed by the Bermudian ILS fund manager.

Deutsche Bank hopes its new template for trading longevity options will be a "lightning rod" for bringing new capital into the market.

The ILS market has turned away from investment risk since the 2008 financial crisis. However, the deadlock over the US government debt limit in October has raised the issue of collateral risk in cat bonds again, as two Munich Re cat bonds suffered small collateral losses this month.

The secondary cat bond market has seen relatively active trading levels over the past month, with ILS investors looking to trade short-dated bonds that come off risk this month, Trading Risk understands.

Premiums on diversifying cat bonds dropped significantly in the third quarter of 2013, according to the latest rate-on-line (RoL) data from Willis Capital Markets & Advisory.

Just a single cat bond has come to market and closed over the past month, but strong demand for Galileo Re's "clean structure" led Catlin to almost double its target cover for the bond.

Leading ILS fund manager Nephila Capital offered a $1bn reinsurance cover to the Florida Hurricane Catastrophe Fund (FHCF) this year, Trading Risk has learned.

After Monte Carlo, Baden-Baden, Trading Risk New York and this month's ILS gathering in Bermuda, the autumn 2013 conference season will be almost at an end, but have all the talk-fests got the sector any closer to knowing what will happen at the 1 January renewals and the mid-year 2014 renewals?

AQR Re has raised $150mn for a new higher risk-return strategy that will be deployed in 2014 and include a substantial focus on retrocession products.

Scor is seeking to establish a $60mn sidecar as part of its 2014 retrocession protection, building on its strategy to seek greater quota-share cover, Trading Risk can reveal.