June 2010/1

Moody's pulled its downgrade review on two tranches of Glacier Re's 2008 Nelson Re cat bond as the ratings agency determined the notes are unlikely to be hit by Windstorm Xynthia losses and are not negatively impacted by recent upheaval at the Swiss reinsurer.

If the (re)insurance industry is hit by a market changing loss this year, capital will flow into sidecars and existing companies rather than a wave of start-ups.

ILS investors will have watched with interest as the US National Oceanic and Atmospheric Administration (NOAA) added to the consensus for above-average storm activity this year.

Investors in the lowest tranche of Avalon Re - the first ever securitisation of excess liability exposure - will pay a loss of $13mn as the bond defaulted at its final maturity date on 7 June.

Start-up insurance-linked investment firm Elementum Advisors LLC has won a second major mandate with its appointment by "one of the largest North American pension plans".

Populist Florida governor Charlie Crist went against the wishes of his own insurance commissioner and the insurance industry.

European industry loss index PERILS has shaved EUR10mn off its loss figure for Windstorm Xynthia as it released a revised second estimate at the end of May.

After a challenging year for many of Florida's standalone homeowners' insurers, 1.6 renewals at least offered some comfort as the average cost of renewing programmes fell significantly against a backdrop of surplus capacity in the wider reinsurance industry.

Ambitious plans to publicly float an evergreen reinsurance sidecar for the first time ran aground in early June as Catlin Group pulled the listing of Long Bay Re.

Reinsurance broker Willis and New York based Phoenix Capital are set to be the next firms to launch secondary ILS trading desks.

Secondary market trading has ground almost to a halt in recent weeks, as investors tried to digest a very US wind-heavy ILS issuance season.

Pricing on Avalon Re's loss-struck $135mn Class C notes almost doubled to 91 cents on the dollar on the back of last minute trading ahead of their final maturity in June.