ILS managers
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The CEO cited ‘no change’ in appetite from a shift in the capital mix.
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The manager is looking to buy positions on the secondary market.
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The ILS manager leaderboard demonstrates the ongoing popularity of cat bonds.
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Secondary market activity and hedging would be likely if a Beryl-sized storm tracked toward the US.
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This is lower compared to 8.2% recorded by the index in H1 2023.
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DeCaro is one of the cohort of pioneering ILS managers.
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The Swedish fund AP2 invests in Fermat GAM, Elementum and Credit Suisse.
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Sub-1% management fee and performance fee-only structures have evolved in ILS.
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The regulation now allows pension funds a more flexible benchmark for measuring alternatives.
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The Sussex Capital ILS platform managed $440mn at its 2019 peak.
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Citizens also secured $1.1bn of limit for its Everglades Re cat bond.
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The capital will be allocated to a pure cat bond strategy, sources have confirmed.
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The capital will be deployed by Bermuda-based special purpose insurer Arachne.
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Combined AuM of UCITS funds stood at $11.3bn as of 26 April 2024.
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The pension fund’s ILS allocation as of the end of 2023 was CHF300.3mn ($356.8mn).
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The syndicate snatched the number one spot from Chaucer’s Syndicate 1176.
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The Guernsey legacy carrier is working with an independent valuer.
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Of the 18 top-tier ILS managers, 10 recorded growth, while eight were flat or down.
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Cat bonds and sidecars are well positioned for growth, while private ILS will benefit from further innovations to improve liquidity.
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In its semi-annual report for the six months to 31 July 2023, the manager said the fund had returned 2.74% over the half-year.
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The bond will provide protection from named storms in Florida for three years.
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The firm will deploy newly developed, proprietary cat bond analysis platform Hubble.
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The new fund generated 11.2% in profits for the period from 27 January to 31 October last year.
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Schwartz will set the firm’s investment process on its ILS, equity and debt strategies.
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The asset manager’s flagship ILS funds posted stellar returns for its 2023 fiscal year.
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Projected 2024 ILS returns remain historically high, but signs of increased appetite for top-layer cat risk and top-end retro raise questions over how long this will last.
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The Eurekahedge ILS Advisers Index has posted the strongest performance for October since it started in 2008.
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ILS managers are still waiting for hard market growth.
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The Zurich-based ILS manager has grown the fund by around 167% from $150mn as of mid-2021.
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Artex hopes the rebrand will bring greater efficiency and a higher level of service to clients
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With more ILS managers chasing the popular bond space, how will new operators differentiate themselves?
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De Klerk spent a decade at Artex Risk Solutions, where he created special purpose insurers and closed cat bonds.
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The investment manager held its outlook at strongly overweight for cat bonds, retro and private ILS in Q4.
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Prior-year cat loss years that are finally shaking out drove fee benefits in Q3.
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The Bermudian firm said it expects the acquisition could drive more growth than the prior forecast of $2.7bn incremental premium.
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The ILS firm reported $6.8bn of assets under management at the third-quarter mark.
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A market-wide loss of $700mn would amount to around 15% of the total amount of life ILS assets under management .
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Mortgage ILS issuance has totalled $787.2mn so far this year.
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The manager has made four appointments including two internal promotions.
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The fund has been adapting its investment strategy in light of inflation and rising interest rates.
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The Bermuda-based collateralised reinsurance platform Sussex Capital was set up in December 2017 and had more than $400mn of assets at its peak.
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The fund had taken major losses on cat-related investments, including through Southeast primary carriers Weston and Southern Fidelity.
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The recent ILS start-up was the only new mandate for 2022 after the Dutch firm had added two new mandates in 2021.
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The fund is on course for its strongest year of returns since inception in 2014.
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Hiscox and Aeolus are looking to capitalise on strong investor appetite for cat bonds this year with their respective fund launches.
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Private ILS outperformed cat bonds in August, as hurricane season earnings began to kick up a gear.
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The Elementum executive told Trading Risk New York that “appropriate returns” over time were the key to a sustainable ILS market.
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ILS capacity in the form of retained earnings and new inflows is shaping up to meet growing demand for reinsurance and retro coverage.
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The move comes as investors are on track to reject a bid from Liontrust.
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The industry’s ability to draw new capital will hinge on the outcome of the Atlantic hurricane season.
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The scandal over letters of credit at Vesttoo has put a spotlight on the casualty ILS segment, where Ledger Investing is growing market share.
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Risers and fallers emerge within peer group of larger ILS firms, with Twelve Capital and Pillar the fastest growing in H1.
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The reinsurer recorded net income of $1.9mn, helped by a reduction in losses and loss adjustment expenses.
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The obvious question is where is the capital behind the letters of credit that were being pledged on its transactions.
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The ILS manager said returns on casualty ILS were "much higher than on the diversifying nat cat perils such as Italian quake or German flood".
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Howden Tiger worked on the structure of the deal with the unnamed syndicate.
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The life segment has shifted from its genesis in mortality and morbidity risk transfer as lapsed risk deals have proliferated.
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The firm has posted a combined ratio of 75.4% for 2022.
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Nephila Syndicate CEO Adam Beatty said that the firm hopes to grow its new specialty syndicate to $500mn of premium within the next few years.
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Capital has begun to flow again after a challenging time for ILS fundraising in 2022 – but there is a clear shift underway.
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In a discussion at Trading Risk’s London ILS 2023 conference, panellists compared the current cyber ILS market to the cat market in the 1990s.
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The firm noted that investor pushback at the January renewal had resulted in "the cleanest risk" being transferred to the capital markets.
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UBS previously explored setting up an ILS offering, but instead opted to offer other firms’ products.
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There are enough drivers supporting the trend for cat bond segment growth that ILS managers are likely to be plugging this business heavily in the short term, even if it is less attractive in fee yield.
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The syndicate’s combined ratio was down for the fifth year in a row.
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ILS managers have pioneered externally managed rated carriers, but have done so with cost-consciousness in mind.
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The aim is to launch a casualty ILS product that would enable Saudi investors to access US casualty risk.
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The casualty ILS fund has been on a hiring spree since its $75mn Series B fundraise in June last year.
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The ILS manager said the cat bond sector could double to become a $70bn market in the next three to five years.
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The asset manager said this year’s conditions were the most attractive in ILS history.
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Hudson Structured Capital Management (HSCM) Bermuda has set up an insurance credit strategy seeded with $400mn of initial capital from Security Benefit Life Insurance Company.
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Structures have been developed that would avoid “excessive capital trapping”.
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The executive will build out Vesttoo’s capital markets team in the region.
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Following rate increases at 1 January, projected fund returns for 2023 are up several points year on year, with a boost also from higher Treasury rates.
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The CFO of parent company Markel has said it aims to lean into property cat through Nephila.
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Pure cat bond funds outperformed the sub-group which includes private ILS for the year.
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Nephila achieved significant rate increases at 1 January and expected the strong rate environment to continue this year.
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The former Lancashire treaty underwriter had worked at the ILS platform since October 2021.
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For the ILS market, perhaps more than any other, the outcome of this year’s high inflation is still to be determined. Unlike other industries that are suffering increased immediate costs, this sector’s performance – as always – is ultimately driven by events no one can foresee.
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The incoming president for insurance also highlighted the role Nephila could play in the transition to net zero.
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The former analyst at Aeolus joins the growing number of ILS experts to join the firm.
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Hurricane Ian’s legacy will undoubtedly lead to some shake-ups in the ILS sector, with ongoing progression outside cat and ESG strategies likely to be a focus.
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The syndicate’s growth headroom is somewhat constrained compared to the Lloyd’s market average.
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The ILS firm’s CEO Nilsen said life ILS was “poised for growth in a higher interest rate environment”.
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The index year-to-date loss was trimmed to 3.41% in October, from 4.28% in September.
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The bond will provide coverage up to 2026, extendable to 2029.
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Baltesar worked for Hiscox Re and ILS before joining Credit Suisse ILS in 2019.
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Ludlow Re will grow “opportunistically” where there is confidence of producing attractive returns.
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Some firms have fared better than others in the competition to raise funds during the year.
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The company said it expects portfolio positions to reflect the updated figures soon.
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Transparency and alignment of interests are the keys to expanding casualty ILS.
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AIG’s Q3 net cat losses of $600mn included $450mn from Hurricane Ian.
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It’s the third year that the New Zealand sovereign wealth scheme has increased its holdings in ILS.
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The Massachusetts retirement system issued a request for proposals from ILS managers.
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The outcomes were better than the Swiss Re global cat bond index decline after the major hurricane.
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The Swiss ILS specialist pointed to potential impacts on Floodsmart, Florida indemnity and index-linked bonds.
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The cat bond specialist addressed potential losses on Florida wind-exposed bonds.
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Some are suggesting a rotation of the investor base may be underway, with a move back towards more opportunistic funds.
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With investor fundraising prospects challenged due to macro factors, there are questions over how much US demand growth the ILS market can absorb.
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How much capacity is available to meet rising cat reinsurance demands was a key theme throughout this year’s Rendez-Vous.
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The HSCM co-founder said the cat reinsurance market was going through a profound shift that would open ILS opportunities for growth.
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The ILS broking leader was speaking at the first in-person Munich Re ILS roundtable at the Monte Carlo Rendez-Vous since the pandemic.
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Cat bond funds posted their first profitable month since March.
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Former Natixis banker Alexandre Delacroix will focus on a range of capital market activities.
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The manager’s analysis concludes some funds manage risk more efficiently than others.
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Some might see the ILS sector as more institutionalised compared to personality-driven hedge funds, but there is little doubt that the original generation of ILS leaders will be hard to replace.
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Cat bonds have built-in protections against the threat of inflation, Schroders ILS chairman Dirk Lohmann has argued.
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The group-level cat impact to the combined ratio improved 0.3 points to 1.8.
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Private ILS outperformed cat bonds during the month.
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Total issuance of $4.86bn was transacted in the primary market.
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The figures include funds managed by ILS manager Fermat Capital Management.
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Craig Dandurand is to depart Australia’s Future Fund after nine years, as the pension scheme reorganised its investment team, putting its ILS portfolio under the responsibility of new head of alternatives Tammi Fischer.
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The ILS firm reported $8.5bn of assets under management at mid-year.
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The Australian investor made 5.0% on its ILS investments in the 12 months to 31 March.
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Gupta moves from Axis Capital where he served for four years in the New York team.
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As ILS players such as Vesttoo seek to grow beyond cat risk, Trading Risk looks at some of the questions surrounding how casualty ILS deals will operate and the amount of risk transfer undertaken to date.
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Kalachian moves from Allianz where he was a managing director.
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The hardening rate environment in Florida provided a mid-year opportunity for some, but overall there was little growth.
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The ratings agency affirmed its rating on Resolute Global Partners’ Bermuda platform, noting its exposure to aviation war risks.
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The regulator has proposed several changes to enhance the regime for insurance special purpose vehicles which, in turn, could boost the UK ILS market.
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The vehicle was supported by a group of institutional investors.
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They will join the team led by Stefano Sola to bolster Vesttoo’s alternative investment products.
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Beyond pandemic exclusions, there has been a mixed response to changing ILS terms after the trapping issues.
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With reinsurance availability scarce and costs rising, several carriers have called an interim halt to new homeowners’ business.
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Major ILS providers active in Florida including Nephila and Aeolus lifted assumed premiums.
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The issuance will be fronted by Hannover Re with an initial attachment level of $2.2bn.
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The bond will provide cover against named storms in the US.
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The hire of the senior Horseshoe executive follows two earlier ones, as Bryce Wojciechowski and Alex Staab joined as analysts.
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The carrier has shared insurance and reinsurance risk with ILS partners in the past, but the ILS team reports to Axis Re CEO Steve Arora.
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Thunderstorms in the US and an earthquake in Japan caused minimal losses to ILS.
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The reinsurer revealed its Ukraine loss charge excludes aviation.
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Lloyds and London "a little bit missing" in enabling creative dialogue'
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In certain areas more collaboration is needed but in others the market will continue to get more diverse as investors respond to post-Irma challenges in differing ways.
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The panel discussed the need to adapt to ESG and climate change
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The broker put ILS capital at $96bn by year end, $1bn lower than mid-2021 but ahead of its $94bn year-end 2020 estimate.
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The fund’s prospectus showed 2017 was its only negative year since 2014.
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The pension fund is drawing back its investments in Aeolus and Nephila and set up a new mandate with Pillar.
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The former AlphaCat and Aspen executives have teamed up to bring an ESG focus to a new independent ILS platform.
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Experts say cyber ILS offerings including cat bonds could be near, but concerns over structures, modelling and correlation persist.
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March brought a flurry of people moves in the ILS market.
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Swiss Re’s Sector Re includes aviation coverage, while some direct ILS exposures exist in marine retro where firms like ILS Capital and Lancashire play.
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Political violence and aviation coverages had been thrown into marine composites as the market softened.
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The Swiss rail fund made a 2.4% loss within its ILS portfolio.
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The reinsurer said the third-party platform, which reached $2.2bn at the start of this year, provided capital relief and supported nat-cat capacity.
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It scaled back in Europe and Japan but entered the hardening retro market.
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Bermuda will be one of the new jurisdictions for the combined Irish financial services firm.
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ILS funds were showing pockets of positivity as market dynamics shift.
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Having set up its London Bridge ILS platform, Lloyd’s believes it can leverage its reinsurance-to-close (RITC) mechanism to develop an ILS market for casualty, CFO Burkhard Keese said on a results call yesterday.
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The Canadian pension fund increased its overall proportion of ILS assets to 0.6%.
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The casualty ILS platform said it had handled more money in the past three weeks than in its first three years.
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Even though underlying ILS market conditions are improving, getting a hearing from investors could become harder.
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The company ceded 67% more cat premium to Nephila in 2021 after pulling out of cat reinsurance itself.
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The industry has moved on from an initial focus on the nat-cat element of ESG.
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Courts in Bermuda and the US approved the move, which had earlier been subject to investor litigation.
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There were 220 trades in the secondary market in Q4, as aggregate and Florida bonds were less liquid.
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Talks between the regulator and practitioners are ongoing, with the market picking out several key threads that could assist local transactions.
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Coca Cola has downsized its ILS holdings almost every year since 2017.
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The reinsurer said it was anticipating increased volume for catastrophe bonds and collateralised reinsurance this year.
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Combined with a challenging fundraising landscape that is likely to have led to investors cutting more deals, 2022 will be a year of fiscal pressure.
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The impact on different perils should be distinguished, the advisory firm noted.
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The flagship Atropos fund reached $1.4bn while its cat bond strategy is sized at $831mn.
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Resilience bonds attempted to link up financial goals that proved to be too mismatched.
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The ILS fund has roughly doubled in size in a year, after receiving further funds from new and existing investors.
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Many investors are in a “hold and assess” pattern on ILS, but some changes in the broader landscape could be more positive for the industry.
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There are two strands to the investor response to ILS climate-change issues, the consultant said.
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Investors are increasingly concerned about legislative changes and climate change, but there are drivers for optimism, the consultant said.
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The firm will look to grow its offerings on climate change and natural catastrophe risk.
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Southern Fidelity is seeking to lift homeowner rates by 85%.
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The Swedish pension scheme is ‘happy to absorb concentrated [cat] peril risk’.
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The December redemption was raised to 7.5% of the fund from the usual 5%.
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The regulator is also reviewing Solvency II post-Brexit.
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He will replace Jonathan Malawer, who held the position for fourteen years and has left to join a new firm focussed on climate risk investments.
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The Swedish pension fund will participate in Swiss Re’s natural catastrophe business.
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ESG, non-catastrophe and rebuilding after personnel changes will be among the themes of the year.
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Many private deals featured in final renewals negotiations as overall cat risk appetite was cut back, with some ILS segments hard-hit.
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The firm says it has condensed the securitisation process into weeks rather than months
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As the renewal is expected to spill over into 2022, the two-speed market will put pressure on retro-reliant carriers.
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The former Swiss Re Capital Markets executive will report to ILS unit CEO Paul Schultz.
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The listed mutual fund will be overseen by new recruit Niall MacGillivray.
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CyberCube forecast further capital market capacity will hit the cyber insurance market next year.
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The Singaporean authority is understood to have pursued a higher risk-return strategy within the asset class.
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Personnel turnover and ongoing redevelopment into new areas were the notable themes of the past 12 months.
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1 January renewals are running late across the board as reinsurers hold out for improved terms, but the retro segment is the most challenged for capacity.
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The fund’s stake in Helios remains unchanged at 19.4%.
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Cat risk-takers are benefitting from some money leaving the sector, but is this disruption creating inefficiencies as well?
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HM Treasury is proposing to cut the tax burden on ILS transactions.
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The London-based manager said the open-ended fund structure was no longer “optimal” for mingling life and non-life exposures.
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Manjit Varwandkar, who managed the parametrics product line at Sompo, will manage the Medici Fund.
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The Australian investor said it was talking to reinsurers about fine tuning catastrophe portfolios as it reported an 0.9% ILS return in Q3.
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The award-winning Danish Red Cross-sponsored deal has made its stock exchange debut.
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November moves included a new team at Inver Re.
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The topic of quota-share support is becoming all the more crucial because supply is shrinking at the same time as demand is rising.
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The carrier has ramped up fundraising activities this summer as it seeks to broaden its platform.
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The carrier is looking to raise annual aggregate protection from the new ILS deal.
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This week’s news that the UK plans to introduce a statutory requirement for regulators to consider growth and competition targets will be taken by local ILS market observers as a modest win.
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Axis Capital has signed up Patrick Witteveen, European head of investor relations at Securis, for a new role in its ILS division, Trading Risk has learned.
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The Canadian pension plan Ontario Teachers’ will support three Lloyd’s syndicates – CFC, Beazley and Beat – via its initial deal.
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The Dutch firm had given the AIG-owned platform a mandate that could range from EUR500mn to EUR1bn, covering US cat reinsurance.
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Eclipse Re has issued a series of large private ILS issuances across four tranches totalling $277.2mn, significantly boosting year-to-date volumes, Bermuda Stock Exchange filings show.
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HannoverRe said that EUR180mn of its EUR221.6mn ceded Ida losses stemmed from ILS businesses that Hannover Re fronts.
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The insurer’s reinsurance and ILS business is “performing strongly,” said outgoing CEO Bronek Masojada.
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The new London Bridge framework is less useful to the bulk of specialist ILS asset managers than it is end investors.
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The fund’s high risk, high return strategy will aim to replicate performance of the cat bond market.
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The UK government’s policy paper provides for use of secondary legislation to make changes.
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Everest Re CEO Juan Andrade said appetite had gone “very much higher up in structures”.
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The new material provides frameworks for discussing ESG and aligning objectives.
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Re-allocation of capital rather than true growth seems to be a more likely outcome for the sector in the near term.
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The larger fund PK SBB revealed it made a loss of 7.0% in its ILS portfolio for 2020.
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A Schroders report cites diversification as a key driver of investor appetite.
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The investor more than doubled its allocation to Elementum Advisors.
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The group will enable efficient access to less liquid and restricted issues.
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Modelling firms say their data shows events like Hurricane Ida should be anything but a surprise.
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The city’s pension fund recorded a 3% return from its ILS portfolio in 2020.
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The firm appointed provisional liquidators, with limited “light touch” powers in late September, as it made a buyout offer in the face of legal action.
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The investor has significantly cut back its allocation over the past few years.
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The manager said last year it wanted to deploy $100mn to $200mn in casualty ILS.
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Firm says level of protection secured is testament to market interest in mortgage credit risk.
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Discussions with industry and in-country partners have so far foregrounded parametric solutions.
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Markel will provide approximately $150mn to facilitate the buyout of the retrocessional segregated accounts of the funds, as well as tail-risk cover to release $100mn of trapped collateral.
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The HSCM founder said that, in the last few years, the cost of large losses had been driven up by interconnected events.
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He becomes the first service company provider to hold the title.
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Pricing on the Japan earthquake deal settled toward the higher end of guidance.
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The Durant Re IC deal was the first humanitarian cat bond in the history of the ILS market.
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The high-profile ILS lead has departed Aon Securities to spend more time with his family.
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Aon’s head of capital advisory noted that future investors could be “plugged in” to the Constellation structure set up for the initial JP Morgan deal.
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One market participant said the strategy was $250mn in size, but it is not known how much business it has so far written.
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The lack of modelling expertise for higher-frequency, secondary ‘all peril’-type losses is putting a rosier tint on catastrophe bonds
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Carriers will not necessarily accept smaller returns in exchange for high ESG scoring vehicles and risks must be properly priced, according to Dirk Lohmann, chairman of Schroders Capital ILS.
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The deal covers the reinsurer’s worldwide cat XL book, as Scor plans to ramp up P&C growth.
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Kevin O’Donnell also said he saw social inflation as more of a concern for the industry than climate change.
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Hannover Re CEO Jean-Jacques Henchoz told Trading Risk there was a “question mark” about whether demand would carry over into next year.
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The former Willis Re vice president and head of European ILS joins as GC’s London ILS leader Des Potter is set to retire.
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It is not so much the size of the hit, as the regularity of moderate cat events that is worrying risk-takers.
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Year-to-date returns were up to 1.13% as funds continued to recover after being dragged into the red by Winter Storm Uri.
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The reporting agency for industry loss triggers has been expanding territories and natural peril coverage over time.
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It recognised the debate surrounding the “plausibility” of such scenarios.
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The deal takes year-to-date private cat bond volumes up to $601.7mn, according to Trading Risk data.
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It comes amid fears of increased levels of inflation given the low interest environment and high levels of government recovery spending.
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The business acts as a transformer, allowing traditional asset managers the chance to participate on collateralised (re)insurance transactions.
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With investors’ decision-making increasingly influenced by ESG concerns, the ILS industry is grappling with the challenge of how best to articulate its credentials.
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The firm’s co-CEO Richie Whitt said the firm might also consider growing its retro portfolio.
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The reinsurer had previously signalled it would grow its net reinsurance portfolio after deploying less third-party capital.
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The collapse of the Aon-Willis deal will have no noticeable impact on the ILS broking business, as the market waits to see what the fate of the Willis Re team will be.
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It’s been a year of high turnover in general, but the ILS low-cost operating model can become a disadvantage in managing through such disruption.
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The broker said ILS capital had reached $96bn at the end of Q1.
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Cat bond fund managers continue to reap growth as the industry has rebounded from its Covid dip.
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Her move follows overall leadership change at Nephila Climate.
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Local government pensions funds in the UK are partnering up, creating new strategies and may seek diversification.
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The firm’s ILS director Chin Liu said the half-year period was fairly quiet for catastrophe events.
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The Canadian pension fund and the ILS fund provide Funds at Lloyd’s capital alongside traditional reinsurers.
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The firm said a process to try to sell the insurer was underway.
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This comes after the insurer raised $495.9mn from a Radnor transaction in Q1 2020.
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Across a wide range of different ILS strategies, there are a number of managers that have failed to gain critical mass in the past 5 years.
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The underwriter had worked with the ILS firm since 2018.
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In the later stages of its liquidation, the manager’s listed fund has made an 8% uplift in May on fire releases.
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Jasmine DeSilva will work on strategic initiatives and business development for the ILS services provider.
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The reinsurer is planning to accelerate growth in its insurance business.
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Reinsurers from Bermuda, the Cayman Islands and Japan have also provided capital to the syndicate for its 1 July launch.
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The former Peak Capital CEO has left the ILS platform he set up.
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