Posts Tagged ‘macroeconomic’



October 27th, 2015

Transforming (Re)insurance Risk

Posted at 1:00 AM ET

anger_cory-smCory Anger, Global Head of ILS Structuring, GC Securities*

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Over the past few years, the capital markets have become increasingly involved in (re)insurance risk. The capital providers have participated in sidecars, catastrophe bonds and more recently in hedge fund-backed reinsurance companies and collateralized reinsurance vehicles. They also have considerable appetite for subordinated debt as they strive for additional yield in today’s low interest rate environment. The attractiveness of (re)insurance market risk to the capital markets is clear. They obtain higher yields and the opportunity for diversification into risks that are not completely correlated with financial market risk. The way capital markets access (re)insurance risk is either through investing via specialists funds or setting up their own in-house teams to better understand and analyze (re)insurance risk.

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October 18th, 2015

Transforming (Re)insurance Risk

Posted at 8:30 PM ET

paire-eric-smmasters-unoptimised-bryan-joseph_9913-sm1Eric Paire, Head of Global Partners & Strategic Advisory EMEA, Guy Carpenter and Bryan Joseph, Principal, Vario Partners LLP

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Over the past few years, the capital markets have become increasingly involved in (re)insurance risk. The capital providers have participated in sidecars, catastrophe bonds and more recently in hedge fund-backed reinsurance companies and collateralized reinsurance vehicles. They also have considerable appetite for subordinated debt as they strive for additional yield in today’s low interest rate environment. The attractiveness of (re)insurance market risk to the capital markets is clear. They obtain higher yields and the opportunity for diversification into risks that are not completely correlated with financial market risk. The way capital markets access (re)insurance risk is either through investing via specialists funds or setting up their own in-house teams to better understand and analyze (re)insurance risk.

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October 17th, 2015

Reinsurance Mergers and Acquisitions Deja-vu, Buyers Beware

Posted at 8:30 PM ET

rhewitt_2015-smRichard Hewitt, Head of Business Intelligence, EMEA

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“The reinsurance market is going through a consolidation phase,” wrote Swiss Re in 1998 (1), and here we go again, or so it seems. Since 2014, there have been four mergers and acquisitions (M&As) within the reinsurance space (2) that are pure consolidations rather than transactions by an acquirer from outside the sector. To date, we estimate that this consolidation wave has affected some USD 11 billion of net premium income and 5 percent of the global reinsurance market. However, that is short of the USD 16 billion and 13 percent, respectively, for the mid-1990s. There is nothing unusual about M&A. It is a cyclical phenomenon and very much in tune with the broader financial market environment. 

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September 30th, 2015

Disruptive Forces to M&A Activity: Soft Market Rates Have Had Limited Impact on Company Returns

Posted at 1:00 AM ET

A key tenet of the anti-correlation theory is that the impact of lower (re)insurance rates will eventually be felt within carriers’ return on equity, thereby forcing action.

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September 29th, 2015

Disruptive Forces to Merger & Acquisition Activity: Globalization

Posted at 1:00 AM ET

Globalization in the insurance industry has historically been characterized by North American companies seeking to expand their business models to Europe, with Asia and South America as their secondary focus. European companies have sought to expand into North America, Asia and Latin America (for Spanish and Portuguese speaking companies).

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September 28th, 2015

Capital With Alternative Strategic Interests Competing For Merger & Acquisition Opportunities

Posted at 1:00 AM ET

While the alternative capital entering reinsurance markets has spurred transactions in accordance with the anti-correlation theory, other investors that have entered the market via acquisition of businesses have certainly blurred the theory’s parameter of the required level of underwriting margin.

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September 17th, 2015

Disruptive Forces to M&A Activity

Posted at 1:00 AM ET

The reality is that many external forces continually disrupt the impact on merger & acquisition (M&A) activity of the insurance pricing cycle. This is especially true in recent years as insurance markets are influenced by wider financial conditions, new investors, globalization and the benefits of healthy profits despite a prolonged period of rate softening. These disruptive forces provide both positive and negative contributions to the M&A-conducive market conditions resulting from the current stage in the insurance cycle.

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September 15th, 2015

Mergers and Acquisitions Developments

Posted at 10:30 PM ET

andrew-beecroft-smAndrew Beecroft, Managing Director, GC Securities*

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New capital inflows, excess capacity and benign catastrophe loss activity have contributed to falling (re)insurance prices and a challenging environment for specialty (re)insurers. These combined factors have been the rationale for predictions of a wave of market consolidation, which appear to have become a reality during 2015 as a series of rumors and announcements grabbed the headlines. 

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July 28th, 2014

The Drivers of Agriculture Insurance in Asia, Part III: What Influences Agriculture Insurance?

Posted at 1:00 AM ET

peter_book_-smaller-hs3Peter Book, Head of Agriculture, Asia Pacific

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Having recognized what is driving agriculture and the importance of risk transfer, the next step is to look at what is influencing the insurance of agriculture and the impact of certain agents, ranging from governments to the (re)insurance industry.

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July 24th, 2014

The Drivers of Agriculture Insurance in Asia, Part II: Factors At Play

Posted at 1:00 AM ET

peter_book_-smaller-hs2Peter Book, Head of Agriculture, Asia Pacific

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Some would argue that individual governments have limited means to control the demand side of the equation. In respect of drivers such as food security and standard of living they are likely to be the main protagonists for change. Certainly the agricultural production sector and individual producers have even less influence.

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