July 2016/1

Axis Capital and Blackstone's joint venture Harrington Re has completed a $600mn capital raise and secured an A- rating from AM Best.

Changes to AM Best's Capital Adequacy Ratio (BCAR) methodology could provide an impetus for US catastrophe-exposed carriers to seek additional tail risk and second-event reinsurance.

Florida Citizens Property Insurance placed under a quarter of its traditional reinsurance programme with collateralised markets this year, down from the third share taken by ILS funds in 2015.

Lloyd's has produced the highest average returns for catastrophe insurance investors since 2002, but the cat bond market has delivered better risk-adjusted performance, Lane Financial found in its Q2 report.

Risk-adjusted cat bond spreads recovered some ground in June as the ILS market earned incremental premium from higher-risk deals, according to RMS data.

Schroders lifted its share in Zurich-based ILS manager Secquaero Advisors to a majority 50.1 percent earlier this year after buying up an additional 20.1 percent of equity.

Second quarter returns from a group of ILS funds tracked by Trading Risk were up year-on-year, despite the impact of catastrophe losses that have affected some private reinsurance strategies.

Cat bond spreads fell in response to sparse new issuance in the second quarter, but some market participants tipped that this could create a brighter outlook towards year-end.

ILS funds have held talks to support a Lloyd's start-up led by former Cathedral Capital CEO Peter Scales, Trading Risk understands.

The introduction of earthquake insurance in China for the retail and residential sectors offers the ILS market "huge potential," according to Secquaero's chairman Dirk Lohmann.

Is the ILS market feeling old before its time?

Retro capacity dried up towards the end of the mid-year renewals, as incremental new demand created a challenge for buyers that entered the market late in the day.