Trading Risk September 2017

Schroders-owned ILS manager Secquaero has won a significant $200mn+ mandate, according to sources, as a number of companies target growth in this sector.

Hurricane Harvey's impact on Texas could potentially produce an underweight loss for the ILS market relative to the broader reinsurance sector.

This is certainly not going to be a year where the reinsurance industry is twiddling its thumbs at the annual Monte Carlo Rendez-Vous.

Cat bond broker-dealers said the market had plenty of impetus left after a record-breaking first half of 2017.

The $430mn Spectrum Re cat bond issued in June this year by fronting carrier Tokio Millennium Re was ultimately for the benefit of Credit Suisse's ILS entities, sources told Trading Risk.

Average ILS fund returns reached 2.23 percent by the end of July, according to the Eurekahedge ILS Advisers Index.

Managers of Bermudian special purpose insurers (SPIs) are taking steps to upgrade their vehicles to Solvency II-equivalent structures, following the introduction of new German regulations last year that made it more difficult for non-European reinsurers to conduct business in the country.

The Prudential Regulation Authority (PRA) is due to issue rules based on its interpretation of the UK's recently published ILS regulations at the end of this month or in early October.

Hurricane Harvey will impact reinsurer earnings but is unlikely to spur a reversal in softening pricing, analysts said.

The latest acquisition by Heritage continues the trend for the larger Florida-based insurers to look to grow beyond their roots into "super-regional" carriers, a dynamic that is not necessarily favourable to their reinsurers.

Underwriting agencies and fronting carriers continued to see demand from insurance sector investors looking for fee-driven businesses, rather than risk-taking entities, as two more M&A deals in this sector were revealed over the summer.

Schroders has appointed Alan Cauberghs as head of private assets to oversee its activities in various sectors, including its ILS division Secquaero.

The major Australian insurers disclosed further information on their reinsurance claims this year following several major storms and a New Zealand earthquake.

The largest component of Harvey's damage will stem from flooding in the Houston area, so who is going to take those losses?

Hurricane Harvey had much less of an impact on the cat bond market than last year's Matthew, but its quick intensification also left less time for livecat traders to manoeuvre ahead of the event.

Willis Re broker Henry Kingham has resigned and is expected to join ILS manager Aeolus, sources told sister publication The Insurance Insider.

The four leading modelling agencies - RMS, Air Worldwide, Karen Clark and CoreLogic - broadly agree wind-driven insured losses from Hurricane Harvey will fall in the low billions of dollars.

The major continental carriers and dominant catastrophe writers are likely to be among the key reinsurers of the regional and specialist insurers exposed to Hurricane Harvey claims.

Susan Lane has joined the captives consulting business of Willis Towers Watson.

Group chief risk officer Charles Mathias has joined the board of Fidelis Insurance, following the departure of Neil McConachie, who resigned as chief financial officer and director in January.

JLT Re has appointed Nicolas Bardon as a partner in its Bermuda operation, reporting to head of office Guy Hengesbaugh.

Barbican's group leader of property treaty business, Aaron Coates, has resigned and is expected to join Twelve Capital later this year, sources said.

Swiss Re Capital Markets has hired Edward Johnson from Leadenhall Capital Partners to join its London ILS team.

Rhodri Lane has been appointed London head of capital markets at Aon Securities. He will replace Darren Bailey, who recently left the firm, sources said.

JLT Re has hired Andrew Ferrier as executive vice president to lead the Western region, based in the firm's San Francisco office.

Can savings on insurance in the future somehow be leveraged to invest in resilience today?

Chaucer is working to establish a new sidecar for 2018 as other Lloyd's (re)insurers consider new third-party capital vehicles, sources said.

Ascot Group has recruited Joe Calise from Guy Carpenter to run Vertical Underwriting Managers (VUM), the first US specialty MGA under its Ethos Specialty Insurance Services platform.

The Canada Pension Plan Investment Board (CPPIB) will support Lloyd's insurer Ascot's plans to grow its newly launched MGA platform, Ethos Specialty Insurance Services.

Shrinking hedge fund Pine River Capital Management has shut its ILS desk, joining the ranks of generalist asset managers that have retrenched from the sector, Trading Risk revealed this month.

Duncan Hennes and Valerie Rahmani have been appointed to RenaissanceRe's board of directors.

Taking on new perils may help ILS markets to compete outside the US, says the Generali executive.