Catastrophe bonds

The average cat bond yield was 7.48 percent by year end as cat bond issuance picked up.

Every New Year the (re)insurance industry looks back at how much natural disasters cost it in the last 12 months – but the 2019 statistics undercut the value of this exercise.

As its Interval fund has continued to shrink, the manager has taken in private fund assets for both cat and non-cat risks.

The broker said reinsurers were looking to address the earnings impact of higher retrocession costs, lower interest rates and greater reserving uncertainty.

Markel is fronting the deal, which will cover insurance business transacted for Nephila by State National.

The reinsurer pegged 2019 cat losses at $52bn, in line with long-term averages but 40 percent lower than 2018.

The retro transaction priced below the target range, according to sources.

Hannover Re issued seven Seaside Re cat bond lites totalling $74.5mn yesterday, following $77mn of notes at the end of 2019.

Both tranches of the transaction priced at the bottom of the guidance range.

The bond has been launched with the same initial price guidance as the 2018 and 2019 issuances.

The reinsurer is thought to be buying the ILW protection for its own account, sources said.

Only 18 of the 33 funds made a gain for the month.