March 2013/1

Dion Williams from law firm Taylor Wessing explores some of the issues investors in the latest generation of sidecars should be aware of

KKR: Nephila can scale up; Blue Water dealing; Amlin makesreinsurance savings

Hannover Re recovered EUR163mn from its retrocession providers in 2012 to assist in paying claims from Hurricane Sandy and the Costa Concordia sinking, which helped its non-life division to lift annual operating profit by 43 percent to EUR858mn

The ILS market needs to make a "paradigm shift" rather than pursue the goal of "convergence" in order to see significant growth, Liberty Mutual's global reinsurance senior vice president James Slaughter said in a panel at the Sifma ILS conference held in New York earlier this month.

Reinsurers are likely to pursue third party capital structures with longer-term horizons such as cat funds or permanent sidecars in 2013, while the number of temporary, opportunistic sidecars looks set to diminish, a panel of experts agreed at the annual Sifma ILS conference.

The small size of the alternative reinsurance sector may constrain the pace of its growth but there is still room for it to expand by 30-40 percent, according to Goldman Sachs managing director Shiv Kumar

At the time of writing, Mississippi's insurer of last resort was on the verge of finalising its reinsurance programme for the 2013 North Atlantic hurricane season.

The future of the Texas Windstorm Insurance Association (TWIA) is looking increasingly uncertain as the US residual insurance market heads toward the reinsurance renewal season.

RenaissanceRe CEO Neill Currie said the company is likely to do more "transformer" business where it acts as an intermediary for third-party capital and protection buyers

Willis has begun marketing a new retro product that is designed to edge index products closer to their indemnity counterparts, Trading Risk revealed earlier this month

The strength of investor interest in the (re)insurance sector is expected to keep spreads tight as ILS prices remained strong on the secondary market throughout March

State insurance pool buyers say that one of the key benefits of working with capital market reinsurers is the competition that it creates with traditional suppliers.