Posts Tagged ‘catastrophe bonds’



September 16th, 2014

Capital Markets Growth and Innovations Continue

Posted at 1:00 AM ET

cory-anger-small2-169 Cory Anger, Global Head of ILS Structuring, GC Securities

 Contact

The influx of new capital into the (re)insurance industry constitutes the largest change to the sector’s capital structure in recent memory. Over the past 24 months, approximately USD20 billion of new capital has entered the market through investments in insurance-linked securities (ILS), funds and sidecars as well as the formation of hedge fund-related reinsurance companies and collateralized reinsurance vehicles.

Continue reading…

September 15th, 2014

Influx of New Capital Continues to Reshape the Reinsurance Market

Posted at 10:30 PM ET

2014-sep-capital-markets-cover-image-crGuy Carpenter today published a new report focusing on the growth in the insurance-linked securities (ILS) market during the past year and some of the recent developments in catastrophe bond structure and risk transfer.

Continue reading…

September 13th, 2014

GC Videocast - Rendez-Vous Press Briefing 2014 (David Priebe) Capacity From New Sources

Posted at 2:11 PM ET

2014-mc-priebe-photoFocusing on the continuing supply of capacity from new sources, David Priebe, Vice Chairman, Guy Carpenter and Head of GC Securities, said: “Guy Carpenter estimates that the global property catastrophe limit exceeds US$300bn, with non-traditional reinsurance in the form of catastrophe bonds, collateralized reinsurance and industry loss warranties increasing from 14 percent last year to an estimated 16 percent this year. This is double the 8 percent of 2008.” Investor interest in such structures, he added, remained high during the period. “Strong investor demand meant placements were routinely over-subscribed, often by multiples of the targeted size.”

Continue reading…

September 13th, 2014

Guy Carpenter Explores Wider Impact of Market Conditions

Posted at 1:58 PM ET

The growing presence of the capital markets, over capacity in most lines and territories, and the ongoing rationalization of buying strategies are not only influencing market dynamics, but also the continuing evolution of the broker into a capital and risk advisor. This is according to the panel of speakers at the seventh annual press briefing held at the Reinsurance Rendez-Vous 2014 in Monte Carlo by Guy Carpenter & Company, the leading global risk and reinsurance specialist, and wholly owned subsidiary of Marsh & McLennan Companies.

Continue reading…

July 7th, 2014

July 1 Renewals Reveal Continued Double Digit Price Decreases Across Many Lines and Geographies

Posted at 5:00 AM ET

Guy Carpenter reports that market pressures at July 1 renewals continued to drive price decreases across virtually all geographies and lines of business, many in the double digit range. As loss activity remained minimal, reinsurers added to surplus capacity and additional capital continued to come into the market via alternative sources. 

Continue reading…

July 2nd, 2014

GC Securities* Completes First Ever Catastrophe Bond Alamo Re Ltd. Series 2014-1 Notes For The State Of Texas’s Windpool

Posted at 6:58 AM ET

GC Securities today announced the placement of the Series 2014-1 Notes, with notional principal at USD400,000,000, through a newly formed catastrophe bond shelf program, Alamo Re Ltd., to benefit the Texas Windstorm Insurance Association (TWIA). This is the first time that the TWIA has utilized the cat bond market to manage its tropical cyclone risks. 

Continue reading…

July 1st, 2014

GC Securities* Completes First Catastrophe Bond Issued By The World Bank On Behalf Of The Caribbean Catastrophe Risk Insurance Facility

Posted at 8:00 AM ET

GC Securities today announced the placement of Floating Rate CCRIF Catastrophe-Linked Capital at Risk Notes, with notional principal of USD30,000,000, issued by the International Bank for Reconstruction and Development, a member institution of the World Bank Group, to facilitate risk transfer on behalf of the Caribbean Catastrophe Risk Insurance Facility (the CCRIF).  CCRIF is a risk-pooling facility that is designed to limit the financial impact on its sixteen Caribbean member governments resulting from catastrophic earthquakes and hurricanes by quickly providing financial liquidity when a policy is triggered. This is the first time that the CCRIF has utilized the cat bond market and the first catastrophe bond directly issued by the World Bank. 

Continue reading…

June 17th, 2014

Alternative Market’s Impact On Traditional Reinsurers

Posted at 1:00 AM ET

The April 1, 2014 and June 1, 2014 renewals indicate that competition from the capital markets continues to play a major role in the abundance of reinsurance capacity that is placing pressure on pricing. Here we review Guy Carpenter analyses examining the impact of the alternative markets on traditional reinsurers and how reinsurance carriers are expected to face that challenge through the year. 

Catastrophe Bond Outlook for 2014: The growing influence of alternative markets capacity is pressuring traditional reinsurers’ business model and challenging them to compete against a model with lower-cost of capital that continues to enter the reinsurance market. Most reinsurance companies have responded to the challenge by leveraging their incumbent status on reinsurance programs, offering similar or better terms and similar or reduced pricing. Particularly, traditional players are emphasizing their ability to efficiently provide reinstatements, which are seen by many as a critical part of core reinsurance programs, particularly for working reinsurance layers. Traditional players are also hedging their bets and creating their own capital markets divisions to attract, manage and utilize capital from third-party sources whether in the form of fund management, managed accounts or sidecars. This will allow reinsurers the opportunity to securitize the most capital-intensive parts of the business while providing valuable cost-efficient capacity in other business lines.

Read the article>>

 

Catastrophe Bond Update, Fourth Quarter 2013: Influence from direct capital markets’ participation in reinsurance programs, coupled with catastrophic insured losses well below historical averages in 2013, put significant pressure on global catastrophic reinsurance pricing. As a result of significantly reduced pricing (relative to recent years), approximately USD7.1 billion worth of new property/casualty (P&C) catastrophe bonds were issued in 2013 - the second largest record year for P&C issuance. The year included seven new sponsors - American Coastal, American Modern, AXIS Capital, the Metropolitan Transportation Authority (MTA), QBE, Renaissance Re and the Turkish Catastrophe Insurance Pool - who collectively secured USD1.46 billion of catastrophe bond capacity. In addition to new sponsors, another prevalent change in the market was the increasing use and acceptance of indemnity-based triggers. Given that spreads have tightened between indemnity and other trigger types, sponsors were inclined to take advantage of investors’ openness to indemnity triggers to reduce coverage basis risk without a material increase in pricing relative to non-indemnity trigger pricing.

Read the article>>

 

Click here to register to receive e-mail updates >>

Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

June 2nd, 2014

Reinsurance Pricing Falls Again at June 1, 2014 as Competition Heightens

Posted at 11:30 PM ET

Guy Carpenter reports that downward pressure on reinsurance pricing has increased since the June 1, 2013 renewal due to continued competitive pressure from alternative markets, strong reinsurer balance sheets and low loss experiences. In its June 2014 renewal briefing, Guy Carpenter reports that competition increased as markets offered abundant capacity at reduced pricing.  Terms and conditions also came under pressure and multi-year transactions continued to be an area of investigation. Traditional reinsurers sought to protect their market share and alternative providers looked to utilize growing funds.

Continue reading…

May 28th, 2014

2014 Reinsurance Renewals

Posted at 1:00 AM ET

As we approach the June 2014 reinsurance renewals, we review the reinsurance renewals Guy Carpenter has reported on so far this year.

April Renewals Bring Price Reductions & Focus on Tailored Coverage: Guy Carpenter reports that the April 1, 2014 renewal was marked by price reductions and more tailored reinsurance coverage. Strong balance sheets, an abundance of capacity and a consolidation of buying led to lower reinsurance pricing across most territories and business segments at the renewal.

Read the article>> 

 

January 1, 2014 Renewals Bring Downward Pressure on Pricing: Guy Carpenter & Company reports that reinsurance rates-on-line fell at the January 1, 2014 renewal in nearly all classes and regions. According to Guy Carpenter’s 2014 global renewal report, strong balance sheets, relatively low loss experiences and an unprecedented influx of convergence capital spurred competition and innovation at renewal. These factors led in turn to surplus capacity across most business segments as competition spilled beyond property catastrophe lines.

Read the article>> 

Click here to register to receive e-mail updates >>