Posts Tagged ‘sidecars’



November 2nd, 2017

Asia Pacific Catastrophe Report 2017: Executive Summary: Protection Gap and Convergence Capital

Posted at 4:00 AM ET

cover-thumb1The proportion of losses uninsured in the Asia Pacific region remains high. For example, examination of this year’s major landfalling typhoons in China shows a wide discrepancy between economic and insured losses.

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January 6th, 2016

Chart: Estimated Dedicated Reinsurance Sector Capital, 2012 to YE 2015

Posted at 3:27 PM ET

The chart shows that a preliminary estimate of total capital dedicated to reinsurance is approximately USD 400 billion, unchanged from the previous year.

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September 3rd, 2015

Dedicated Reinsurance Capital Estimate at July 1, 2015

Posted at 1:00 AM ET

Guy Carpenter’s estimate of dedicated reinsurance sector capital as of July 1, 2015 was again produced through our work with A.M. Best. Our estimate is not a simple aggregation of the capital of all companies that write reinsurance since some capital is allocated to the insurance business or other outside interests. In fact, we have seen increased evidence that some companies are shifting capital toward insurance lines and away from reinsurance lines based on the current rate environment. A.M. Best and Guy Carpenter have estimated the amount of capital dedicated to writing reinsurance by reviewing A.M. Best’s proprietary capital model (BCAR) results as well as line of business allocations. Our current estimate of total capital dedicated to reinsurance is approximately USD 400 billion of which the convergence capital, including catastrophe bonds, industry loss warranties (ILWs), collateralized reinsurance and sidecars is USD 66 billion.

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January 8th, 2015

Chart: Evolution of Dedicated Reinsurance Capital, 2013 to YE 2014

Posted at 3:14 PM ET

The evolution of dedicated sector capital is presented below. Guy Carpenter estimates dedicated sector capital remained at near record levels having risen to approximately USD400 billion at year-end 2014 from traditional rated markets and all sources of alternative capital including sidecars, collateralized reinsurance vehicles and catastrophe bonds.

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December 29th, 2014

Capital Markets Capacity: Growth Dominates in 2014: Part II

Posted at 1:00 AM ET

Capacity outstanding and size of the overall global property catastrophe limit continued to expand for all forms of capital markets capacity (144A catastrophe bonds, private catastrophe bonds, collateralized reinsurance and sidecars).

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December 24th, 2014

Capital Markets Capacity: Growth Dominates in 2014: Part I

Posted at 1:00 AM ET

The influx of new capital into the reinsurance 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.

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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

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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.

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March 13th, 2014

Catastrophe Bond Outlook for 2014

Posted at 1:00 AM ET

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.

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August 9th, 2012

Chart: Non-Traditional Market Capacity in the Property Catastrophe Risk Transfer Market

Posted at 1:00 AM ET

It is worth noting that while the 144A catastrophe bond* market is the most visible component of direct capital markets capacity in the catastrophe risk market, it is not the largest. Other conduits, particularly collateralized reinsurance and sidecar participations are also meaningful as additional sources of risk transfer capacity.

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July 12th, 2011

Focus on Hurricane Season at July 1, 2011 Reinsurance Renewal: Property Retrocession

Posted at 1:00 AM ET

The run up to July 1 is not traditionally a big renewal period for catastrophe retrocession. It is more about new and opportunistic purchases, as clients look to mitigate the effects of the coming US wind season as best they can. However, it is precisely because of this renewal date’s proximity to the wind season that deals purchased at this time tend to be an important indicator of pricing direction and activity. We have observed that activity within the sector has continued the trend towards rate rises (on both loss-affected programs, and, to a lesser extent, loss-free programs). This activity has been mainly driven by industry loss warranty (ILW) and county weighted industry loss (CWIL) purchases. It must be viewed against a background of significant tornado activity and flooding in parts of the United States and the latest earthquake in New Zealand in June.

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