UK TPR signals renewed focus on sponsor affordability
While the UK TPR guidance encourages a flexible approach to triennial valuations and recovery plans, it cautions that companies pausing contributions should not restart dividend payments to shareholders until they have put their pension schemes back on track to meet their long-term goals.
Swiss Re's new Matterhorn Re 2020-3 cat bond upsized to $215m
The latest catastrophe bond to be sponsored by reinsurance firm Swiss Re has been successfully upsized 7.5% at pricing, we can reveal, with the Matterhorn Re Ltd. (Series 2020-3) transaction now set to secure the company $215 million of U.S. named storm retrocession.
Florida Citizens targets $300m+ Everglades Re II 2020 cat bond
Florida Citizens, the state-supported insurer of last resort, is back in the catastrophe bond market for what will be its seventh issuance, seeking support for a $300 million or greater Everglades Re II Ltd. (Series 2020-1 & 2020-2) deal that will also expand coverage to the Citizens personal lines account for the first time.
Catahoula Re cat bond upsized 20% to $60m for Louisiana Citizens
The latest catastrophe bond to be sponsored by non-profit state mandated insurer of last resort Louisiana Citizens Property Insurance Corporation has been successfully upsized 20%, with the Catahoula Re Pte. Ltd. (Series 2020-1) now a $60 million transaction.
Allstate returns with second Sanders Re II cat bond of 2020
Allstate has returned to the catastrophe bond market for a second time in 2020, something the company has not done since 2017. With a $150 million Sanders Re II Ltd. (Series 2020-2) transaction that seeks Florida specific multi-peril reinsurance for the insurers subsidiaries in the state.
Financial Engineering: A Flexible Longevity Bond to Manage Individual Longevity Risk
This paper proposes an individual longevity bond, a combined investment and insurance product to allow individuals to flexibly manage their longevity risk. The bond is a post-retirement product that combines a lifetime income along with a flexible death benefit to meet bequest and liquidity needs. The longevity bonds are issued through a special purpose vehicle which is fully collateralized with a fixed interest portfolio. We apply financial and actuarial models and techniques that provide transparent pricing for interest rate and mortality risk, the construction of optimally immunized bond portfolios and the determination of a loading and solvency margin for systematic longevity risk. We also quantify the natural hedging benefits of the individual bond cash flows arising from the flexible inclusion of both survival dependent income benefits and mortality dependent bequest benefits payable on death.
MetroCat Re 2020 parametric cat bond pricing lifted on investor response
Price guidance for the New York Metropolitan Transportation Authority’s (MTA) new catastrophe bond has been increased after investor’s fed back that the initial coupon was not sufficient, we’re told, with the parametric MetroCat Re Ltd. (Series 2020-1) cat bond transaction now offering a higher return.
Insurer investment risks could drag on buyout volumes
Several of the eight UK bulk annuity providers have high exposures to BBB-rated fixed income assets, loans, mortgages and property. Widening credit spreads, a result of the Covid-19 pandemic, are currently fuelling a buyout bonanza for well-positioned DB schemes. But a longer recession and credit downgrades could affect some insurers’ ability to sustain huge volumes of new business in the medium term. Downgrades could cause ‘fallen angel’ companies to drop from investment grade to high yield, meaning insurers may have to divert new capital to maintain their position under the Solvency II regime.
Hiscox buys $100m of industry loss warranty (ILW) protection
Hiscox Group, the Bermuda headquartered re/insurer, has acquired additional retrocessional reinsurance protection against peak catastrophe risks with a $100 million slug of industry loss warranty (ILW) based protection secured in advance of the all-important hurricane season.
$100m MetroCat Re cat bond prices 16% above mid-point of initial guidance
The New York Metropolitan Transportation Authority’s (MTA) new MetroCat Re Ltd. (Series 2020-1) catastrophe bond has now been priced, but at the top-end of the revised guidance after investors sought a higher return for the risk, with the deal also sticking at $100 million in size.
CEA now targets up to $700m of reinsurance from new Sutter Re cat bond
California’s not-for-profit residential earthquake insurer the California Earthquake Authority (CEA) is hoping to significantly upsize its latest catastrophe bond issuance, with the Sutter Re Ltd. (Series 20201- & 2020-2) issuance now targeting up to $700 million of reinsurance protection.
Varying pandemic ILS impacts, trapped capital may be held for years: A.M. Best
A.M. Best said that varying pandemic related impacts are to be expected for the insurance-linked securities (ILS) market, with the most concerning likely the fact that collateral could be trapped for years given the significant uncertainty over potential losses.
TWIA targeting $200m Alamo Re II cat bond issuance for 2020
The Texas Windstorm Insurance Association (TWIA) is likely to target $200 million or perhaps greater of protection from an Alamo Re II Ltd. catastrophe bond issuance for 2020, as the capital markets look set to continue playing an important role in its reinsurance program.
CEA's target for Sutter Re cat bond lifted again, now up to $740m
The targeted issuance size for the latest catastrophe bond to be sponsored by the California Earthquake Authority (CEA) has risen again, with the Sutter Re Ltd. (Series 20201- & 2020-2) issuance now aiming for as much as $740 million of reinsurance protection for the sponsor.
USAA returns with first Residential Re catastrophe bond of 2020
USAA has returned to the catastrophe bond market for its first issuance of 2020, with a currently $100 million plus sized Residential Reinsurance 2020 Limited (Series 2020-1) transaction seeking multi-peril reinsurance protection, that will become the insurers 35th cat bond issuance if successfully completed.
Substantial amounts of collateral to be trapped at year-end: RenRe CEO
Renaissance Re, the Bermuda-based reinsurance underwriter and manager of increasing amounts of third-party capital, believes that Covid-19 uncertainty means “substantial amounts of collateral will be trapped” at the end of 2020, the firms CEO Kevin O’Donnell has said.
Catastrophe bond & related ILS issuance hits $6.1bn already in 2020
Catastrophe bond and related insurance-linked securities (ILS) market activity remains buoyant despite the impacts seen from the Covid-19 pandemic, with primary issuance already reaching $6.1 billion in 2020, according to Artemis’ Deal Directory data.
Co-op scheme completes £350m buy-in with Aviva - DB & Derisking
"The Co-operative Pension Scheme has completed a £350m buy-in with Aviva, taking its total transactions this year beyond £2bn, as defined benefit schemes look to capitalise on cheaper deals amid the coronavirus pandemic."
Analytics firm completes global bulk annuity deal with L&G - DB & Derisking
Analytics company IHS Markit has entered into two bulk annuity deals with Legal & General, the insurer’s first global transaction. The deals, one each in the US and the UK respectively, are worth £116.2m in total, covering 1,350 scheme members.
Cat bond investors force pandemic exclusion into new ResRe deal from USAA
The USAA Residential Re 2020-1 cat bond deal documents include an exclusion clause to give investors comfort that no pandemic coverage could be forced under the reinsurance protection the Residential Re 2020-1 catastrophe bond will provide to USAA.
Pricing leaps on Citizens new cat bond, reflecting Florida renewal rates
In a clear sign of ILS fund demands for higher returns from underwriting catastrophe risks in the Florida reinsurance market, pricing for Florida Citizens’ new $300 million Everglades Re II Ltd. (Series 2020-1 & 2020-2) catastrophe bond has leapt significantly above the top-end of guidance.
Building National Resilience: A Strategic Framework For Determining Material Risks
Governments should seek a full, candid view of the critical risks to which their jurisdiction is exposed, regardless of whose responsibility it is to manage them and the challenges of aligning on, and implementing, an effective response. But establishing how to prioritize risk management initiatives, particularly across sectors, can be difficult. A new report from Marsh & McLennan Advantage, Building National Resilience, explores how countries can build frameworks to assess a variety of intersecting, nation-level risks, including stretched health systems, technology governance struggles and biodiversity loss.
Sidecars & quota shares may face highest Covid-19 claims: A.M. Best
The collateralised reinsurance sidecar market and private quota share transactions entered into by insurance-linked securities (ILS) funds and investors may face the highest impacts from Covid-19 pandemic related claims, A.M. Best has said.
Oxbridge Re wants sidecar upsize, investors still on track for ~36% returns
Cayman Islands based reinsurance company Oxbridge Re Ltd. is aiming to upsize its fully collateralized reinsurance sidecar vehicle Oxbridge Re NS Ltd. for the coming underwriting year from June 1st.
Fidelis sponsoring first catastrophe bond, a $100m Herbie Re Ltd. deal
A new catastrophe bond sponsor is coming to market in the shape of Fidelis Insurance Holdings Limited, the specialty insurance and reinsurance firm launched by Richard Brindle, which has launched its first transaction, a $100 million Herbie Re Ltd. (Series 2020-1) multi-peril cat bond deal.
Florida Citizens withdraws larger tranche of Everglades Re II 2020 cat bond
Florida’s Citizens Property Insurance Corporation has now pulled the largest $200 million tranche of Coastal Account linked notes from its Everglades Re II Ltd. (Series 2020-1 & 2020-2) catastrophe bond issuance, leaving just a $100 million tranche being marketed.
EC seeks feedback on cat bonds for climate risk transfer & financing
On April 8, the European Commission launched a consultation on sustainable finance. Among other things, it asks whether the European Union has a role to play in supporting the development of alternative financial products such as catastrophe bonds, that help in protecting against and hedging financial losses stemming from climate- or environment-related events.
Allstate's top-end target for Sanders Re II cat bond lifts to $200m
Allstate’s top-end target for its latest catastrophe bond transaction has been lifted to as much as $200 million, while at the same time price guidance for the Sanders Re II Ltd. (Series 2020-2) cat bond deal has been lifted to the top-end of initial guidance.
RKH & Descartes in parametric wind trade for European asset owner
RKH Reinsurance Brokers, a division of the Hyperion Insurance Group and parametric risk transfer and technology focused managing general agency (MGA) Descartes Underwriting have completed a wind risk trade for a European asset owner, using the AkinovA platform.
NN Life transfers EUR 13.5bn of pension longevity risk to reinsurers
NN Life, part of the Nationale-Nederlanden (NN Group), has secured reinsurance arrangements with leading reinsurers Canada Life, Munich Re and Swiss Re to transfer all of the longevity risk associated with some EUR 13.5 billion of pension liabilities from the Netherlands.
