April 2015/1

The first quarter of 2015 saw a slight hardening of rates on the ILS market, in contrast to the same period last year.

The secondary ILS market cleared a new record-sized trade of the $1.5bn Everglades 2014-1 cat bond in March, sources told Trading Risk.

The residual insurance pools for the states of Texas and Massachusetts have both returned to the cat bond market with new transactions ahead of the 2015 hurricane season.

Cat bond issuance in the first quarter of 2015 hit a record $1.86bn, rising 21 percent year-on-year to comfortably beat the $1.54bn placed in Q1 2014, according to Trading Risk records.

Allstate's seven-year Sanders Re bond has been quietly dropped from the subscription market, making it the second ILS deal to be rejected by investors since a Queen Street offering from Munich Re last year, Trading Risk understands.

The New Zealand Superannuation Fund remains a "fan" of the ILS asset class even at current rating levels, but has reduced its exposure as it waits to see if market softening is a permanent trend, according to its head of investment analysis David Rae.

It's no surprise that participants in the reinsurance industry fight for the power to narrate what is going on in the market.

Endurance chief financial officer Michael McGuire said that the company is likely to focus on ceding quota share business to Blue Capital, the third-party funds platform owned by Montpelier Re, after closing its $1.83bn acquisition of the reinsurer.

AQR's decision to shut its Bermudian reinsurance platform highlights the increasing scale needed to to compete in the ILS funds market, however commentators have said this will not necessarily spur consolidation in the sector.

Florida Citizens Property Insurance is seeking $250mn for its Everglades Re 2015 cat bond, Trading Risk understands