From one of GC Capital Ideas’ more popular categories, we highlight the top Chart Room stories viewed during the year of 2016:
Posts Tagged ‘Capital Markets’
Guy Carpenter & Company reports the decline in reinsurance pricing moderated at the January 1, 2017 renewal across most classes of business and geographies, as compared to the past three renewal seasons. Several sectors experienced increased loss activity, which had only a localized impact on pricing while capacity remained plentiful. After remaining fairly stable in 2015, dedicated reinsurance capital increased by 5 percent from January 1, 2016 to January 1, 2017 as calculated by Guy Carpenter and A.M. Best. The convergence capital segment increased by 10 percent.
Chart highlights the result of a survey taken of 107 insurance and reinsurance professionals conducted by Guy Carpenter at the 2016 annual meeting of the Property Casualty Insurers Association of America when asked which capital sources they will utilize more of in 2017.
“Convergence” or “alternative” capital, which first entered the reinsurance market with catastrophe bonds, has grown steadily over the past ten years and now also includes industry loss warranties, sidecars and collateralized reinsurance. Convergence capital now accounts for just under 20 percent of the global catastrophe limit.
Industry Must Adapt to Emerging Segmentation Phase
Pricing declines continued in the insurance-linked securities (ILS) segment of alternative capital. In turn, this has prompted questions about the sustainability of lower pricing and capacity post-catastrophe event, suggesting that traditional reinsurers’ models and the traditional reinsurance and alternative capital mix of capital sources still need to evolve. Maintaining premium rate adequacy and stable capacity requires better access to the expanding sources of capital and awareness of the benefits of better risk syndication and segmentation, according to David Priebe, Vice Chairman at Guy Carpenter and Cory Anger, Global Head of ILS Origination and Structuring at GC Securities.
Here we review GC Capital Ideas posts on how alternative capital has impacted the dynamics of risk transfer.
Here we review GC Capital Ideas posts on GC Securities* placement of catastrophe bonds completed over the first six months of 2016.
GC Securities* Completes Catastrophe Bond First Coast Re Ltd. on Behalf of Security First Insurance Company
GC Securities, a division of MMC Securities LLC, a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of a single class of the Series 2016-1 Notes with principal amount of USD75,000,000 through the newly formed special purpose insurer domiciled in Bermuda, First Coast Re Ltd., to ultimately benefit Security First Insurance Company (”SFIC”) in SFIC’s first use of catastrophe bond-based reinsurance.
GC Securities, a division of MMC Securities LLC, a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of a single class of Principal At-Risk Variable Rate Notes (”Notes”) with a principal amount of USD 190,000,000 through the newly formed designated activity company (”dac”) domiciled in Ireland, Queen Street XII Re dac, to benefit Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (”Munich Re”). This is the largest issuance of the eleven issuances in Munich Re’s Queen Street series since 2011 and the second largest issuance of all Munich Re’s Queen Street series. Additionally, Queen Street XII Re dac is the first special purpose vehicle authorized for the purposes of Directive 2009/138/EC (as amended) (”Solvency II Directive”) in the 144A catastrophe bond market.