Trading Risk September 2019

The tone of discussions when the hurricane had a projected Florida landfall highlights the precarious nature of the reinsurance market’s current stability. 

The brouhaha over trapped ILS capital has led to the question of whether alternative collateral management solutions will emerge.

There’s no doubt that the stress of a serious hit from Hurricane Dorian to Florida reinsurers will add age lines to the ILS market.

The threat will give the market a chance to expand and increase rates, the analysts said.

ILS proposals must add value, Lloyd’s CEO John Neal said as he discussed which ILS priorities are quick wins and which are on the back-burner.

Trading Risk looks at the dominant themes that the ILS market will be discussing at the 63rd Monte Carlo Reinsurance Rendez-Vous in September.

Markel and Pimco updated the market on their ILS plans.

UK pension funds are acting quickly to get longevity swaps over the line by the 31 October Brexit deadline.

Danish pension fund PKA is to close its ILS strategies and will no longer have any investments in the sector at the end of 2019, a spokesperson for the fund told Trading Risk.

Lloyd’s CEO John Neal said that cutting back the number of “lead” underwriters in the market would be key to paring overall operating costs.

Sidecar sponsors may turn more to the private market in 2020 and face continued pressure on terms as capacity is expected to remain tight for pro rata support, according to experts.

Fourteen cat bonds with a combined value of $1.18bn are expected to be a full loss following 2017 and 2018 losses, Trading Risk understands.