December 2016/1

Returns from investing in so-called "deadcat" bonds - transactions that are nearing maturity and face little or no further catastrophe risk - have softened this year, in a reflection of generally tighter ILS market conditions.

Fully funded structures and approval timeframes were two of the sticking points that industry participants said needed further work as part of the draft London ILS regulations.

Price tightening ratcheted up for the cat bonds marketed in the fourth quarter, as investor demand remained strong with high volumes of transactions due to mature in the coming year.

The trend of ILS managers investing in (re)insurance debt could be set to accelerate after two Florida companies raised capital from the sector in recent weeks.

Florida Citizens Property Insurance will be looking to replace "a portion" of its expiring $2.16bn of reinsurance in what is shaping up to be a challenging 2017 for the company.

What kind of presents might be waiting for the reinsurance market under this year's Christmas tree?

ILS prices fell throughout 2016 in response to a decline in issuance volumes, which also drove innovation and an increased appetite for risk.

US property cat reinsurance pricing is set to continue sliding in the January 2017 renewals, with additional pressure on the retrocession sector as well, sources told Trading Risk.