Trading Risk November 2018

Hurricane Michael is likely to have triggered Floridian window industry loss warranties (ILWs), sources told Trading Risk. The window covers typically attach at ranges between $2bn-10bn and $7bn-15bn, covering Florida wind risks only.

Florida insurers reported manageable catastrophe losses in the third quarter. However, Irma loss creep continued to mount for some, as questions arose over potential coverage gaps following collateral release.

Tokio Millennium Re’s agreed sale to RenaissanceRe will open up an opportunity for competitors to enter the fronting market.

ILS market participants said there are various ways to manage loss creep in a collateralised reinsurance framework.

Two M&A deals in the ILS sector in the past month provide a contrasting view on what kind of acquirers may step forward in the future.

The ILS market must focus on more disciplined underwriting as the reinsurance pricing cycle has been muted, according to Bobbi Anderson, principal and general counsel of Elementum Advisors.

Only around three or four reinsurers are managing true asset management platforms, Hiscox Re & ILS chief operating officer Richard Lowther said at the Trading Risk New York Rendez-Vous.

Insurers and reinsurers of the future will have more of a focus on packaging and ceding out risk, but there may be cultural challenges to reaching that goal, according to speakers at the Trading Risk New York Rendez-Vous.

AIR’s Brent Poliquin says ILS model users are getting to grips with more detail.

People moves in the ILS market, November 2018