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Much of the new, or alternative, capital, which has flowed into the reinsurance market in recent years, will prove permanent in the face of major catastrophe losses, according to the world’s largest asset management firm Blackrock.

IFC, a member of the World Bank Group, has signed two grant agreements totaling $3.9m, with the Syngenta Foundation for Sustainable Agriculture to expand a weather index insurance pilot to over one million East African farmers.

Ratings agency Standard & Poor’s said that while it anticipates some alternative reinsurance capital being allocated to terrorism risk reinsurance in the future, it expects the role of ILS and alternative capital in terrorism reinsurance to remain a minor one.

Here we review recent GC Capital Idea stories on space risk and related insurance solutions.

The search for yield has taken investors into the nether regions of the solar system.

Reinsurance giant Munich Re have teamed up with Germany’s Gesellschaft fur Internationale Zusammenarbelt (GIZ) GmbH to establish a risk transfer system for agriculture in Peru. The project titled; “Integrated Financial Management of Climate Risks in Peru’s Agricultural Sector” will aim to work alongside Peruvian authorities to develop a legal, institutional and structural framework to protect the agriculture business from weather-related risks.

Public-private financing solutions, such as natural catastrophe insurance pools, micro insurance, and alternative risk transfer solutions such as catastrophe bonds, have the potential to enlarge the financial capacity of insurance solutions, by providing affordable cover to a wider pool. With the expertise and capital support from international and regional organisations, the public and private sectors can work together in developing purposeful risk transfer solutions for the region

Reinsurance giant Swiss Re has teamed up with Chinese firm China Pacific Insurance (CPI), to introduce a temperature-index insurance scheme to protect the $73 million hairy crab industry.

Concerned that the lack of terrorism coverage would hit the American economy, the US Congress passed the Terrorism Risk Insurance Act (TRIA) into law in November 2002. Since its inception, TRIA has been reauthorized twice in the form of the Terrorism Risk Insurance Extension Act (TRIEA) in 2005 and Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) in 2007. During this time, the Act has required the private risk market to assume a larger share of the program by increasing deductible and co-share requirements. The private market’s ability and willingness to cover terrorism risks has therefore increased since 2002 because of the federal program.

To find cures for cancer, investors must fund about 150 projects in order to lower the standard deviation of possible returns from cancer cure projects. With such a high number of viable projects, it becomes possible to issue debt. Once it is possible to issue debt, securitization concepts may be layered on top of portfolio theory to find viable cancer cures. As with traditional securitization, various tranches would be created for different risk appetites and with different guarantees for creditors buying those differently segmented risky tranches.

Reinsurance firm Swiss Re has assisted with the development and launch of the first weather derivative backed microinsurance scheme which aims to protect smallholder farmers in Nigeria from the risk of adverse weather patterns.

The advent of green bonds could finally make green indexes big, liquid and desirable. As the first 'fully green' structured product is launched, there is hope that support from governments and investors will help the sector grow

A market for political predictions is set for launch after a federal regulator gave the go ahead, allowing would-be pundits to put their money where their mouth is.

Though PredictIt could easily be confused with online gambling, it is legal — a prediction or futures market for politics that uses the marketplace to forecast events. PredictIt, a nonprofit research project, partnered with a university and restricted wagering on any single question to 5,000 people with each individual investment capped at $850.

"One of the world’s largest reinsurance firms, Swiss Re, recently announced that two million African smallholder farmers are now protected against drought, floods and other natural perils, thanks to the efforts of the World Bank and Swiss Re Corporate Solutions."

"AXA’s specialist digital insurance and banking seed fund, AXA Seed Factory, has partnered with AXA Corporate Solutions and French climate and weather services firm Climpact-Metnext, to launch ClimateSecure, an insurance and weather-risk management platform."

"The real money, peer-to-peer prediction market PredictIt is up and running in the United States. Modeled after the pioneering Iowa Electronic Markets, it offers a platform for the trading of futures contracts with binary payoffs contingent on the realization of specified events."

"Once again the discussion of exchange-traded weather risk management products for Indian farms, companies and insurers has come to the fore, but this time the plan is for a product to be launched after September of this year."

"Renewable energy focused underwriting specialists, GCube Underwriting Ltd. (GCube), has launched a new weather risk transfer product for the wind and hydroelectric energy sectors, an area that increasingly reinsurance and insurance-linked securities (ILS) players seek to tap into."

"The UK’s Bank of England has been asked to review the potential for risks to arise from insurance-linked securities (ILS), catastrophe bonds and alternative reinsurance capital, as these practices can “create connections between insurance risks and other financial intermediaries.”"

"The increased severity and frequency of extreme weather and climate-related disasters presents a grave threat to the important agricultural sectors of emerging economies, a trend that is likely to continue without adequate risk transfer solutions and improved disaster resilience efforts."

"Three Argentinian enterprises have joined forces to develop climate index futures to help agricultural producers to better protect themselves against the impacts of severe or inclement weather, with drought the first targeted product launch."

"A €14m lottery jackpot win has resulted in a payout from the collateralised reinsurance based ILS transaction, according to sponsor the Lottoland Group, a fast-growing Gibraltar licensed online lottery provider."

"Farmers in Kenya are set to benefit from the launch of a new innovative, index insurance scheme which utilises advanced technology and satellite data to assist agricultural workers in the face of flooding and drought conditions."

"The CHF630m operational risk insurance linked catastrophe bond or ILS structure Operational Re Ltd. is still being marketed by global investment banking group Credit Suisse, with April now being targeted for completion and the structure split into junior and senior tranches."

"We have identified seven preconditions essential in the movement towards resiliency and de-risking public sector exposure."

"The 2015 Global Insurance Forum addressed the topic “Filling the Protection Gap” (1). During the conference, key speakers noted the growing divide between the economic losses societies are facing and the role of the insurance industry. Many (re)insurance leaders believe the industry can play a significant role in a rapidly changing global risk landscape with pre-loss financing solutions designed to spread risk, relieve the burden on public finances and improve the resiliency of communities."

"Community-level insurance programs are clear examples of industry innovation that can serve as the switch to initiate broader market change. These utilize index insurance products and pay out benefits if a pre-determined event occurs (a quake with an intensity of a certain level, or a certain rainfall level) (1). Such products provide solutions for many different types of stakeholders:"

"Public sector-related data can be expansive, containing census data, property risk characteristics, historical loss information, risk rating matrices and natural hazard event scientific tracking. In order to facilitate packaging the sometimes unwieldy data in a way that is useful for risk decision making, utilizing outside resources to improve data transparency can be valuable. Public sector resources devoted to building tools that measure risks that are perceived as “uninsurable” can unlock private sector funding."

"Mexico has spent more than $1bn to lock in prices for oil exports next year to help protect public finances as its underperforming economy faces intensifying international headwinds, including the timing of a US rate rise and the US elections."