Trading Risk February 2018

Mercer Investments principal Robert Howie said that single-digit reinsurance rate increases may be attractive to ILS investors given the performance of other asset classes.

Markel Catco's "eye-catching" hike to its wildfire loss reserves in its December monthly report implies that the Californian disasters triggered the firm's "floating back-up" pillars, according to a Numis analyst's note.

Securis and StarStone have agreed a partnership that will expand the ILS manager's US property insurance portfolio, Trading Risk has learned.

Guy Carpenter told Trading Risk that rate increases on retro business ranged from 5 to 25 percent on a risk-adjusted basis, with pricing dependent on loss experience.

The 2017 calendar year was the costliest on record for weather events, with insured losses estimated at $132bn, according to Aon Benfield's Impact Forecasting.

Losses from US primary habitational and coastal hotel accounts have driven pockets of localised hardening in the US commercial property insurance market, with rate increases of as much as 70 percent for some risks.

ILS spreads have widened in the mid-to-high teens range after last year's losses, Swiss Re Capital Markets estimated in its latest quarterly market report.

AIG's surprise move to take over AlphaCat parent Validus continues the trend for reinsurer-affiliated asset managers to dominate M&A activity within the ILS management sector.

Pricing for industry loss warranties is up by 15-30 percent on loss-affected covers, according to figures from brokers, as the market picks up after a slow start to the year.

Undoubtedly, prior positive returns were one of the factors that weighed with investors who supported Markel Catco's successful reload last year.

The sidecar market has expanded notably in 2018 as Sompo and Axis became the latest carriers to provide updates on new or expanded vehicles.

Former Novae direct and facultative (D&F) head Nik Lucking is to lead Barbican's new property D&F underwriting platform in Bermuda.

Aspen Insurance CEO Stephen Postlewhite has left the company, the Bermudian carrier said in a statement last month.

First quarter cat bond issuance has already reached $1.56bn after the World Bank's Latin American earthquake cat bond upsized to close at $1.36bn, according to Trading Risk data.

Bermuda-based (re)insurer XL Catlin placed more than $500mn of new catastrophe limit for 2018 and increased alternative market retro support to more than $3bn, as ceding strategies among major carriers diverged following last year's losses.

Abuse of side pockets in the financial crisis - when hedge funds locked in investors to avoid having to sell off discounted assets - has made the practice less palatable in the wider financial markets.

LGT ILS Partners launched its Bermudian rated vehicle Lumen Re with $350mn of equity, according to an AM Best rating report.

The second-largest ILS manager posted a $200mn incremental gain in assets under management in January as it said it chose not to draw down on some post-loss capacity.

Wildfire losses had a varying impact on some of the reinsurer-affiliated ILS platforms in the fourth quarter.

Floridian insurer Heritage has named Kirk Lusk as its new CFO with effect from 28 April, when Steven Martindale will step aside.

TigerRisk has hired Marc Beckers as partner and head of Europe, Middle East and Africa (Emea).

Hymans Robertson has hired actuary Baljit Khatra from Mercer as a risk transfer consultant.

Axis said it would combine its ceded reinsurance operations and third-party capital business into a single department as it announced a broader restructure.

Vic Pannuzzo is to become chief executive of Artex Risk Solutions' new office in Singapore.