Blue Halo Re 2020 cat bond launches at $100m for Allianz Risk Transfer
Allianz Risk Transfer, a specialist and alternative risk focused unit of the Allianz global insurance and reinsurance group, is back in the catastrophe bond market with a $100 million Blue Halo Re Ltd. (Series 2020-1) transaction, the first by the issuer in four years.
3i buys in £650m across pensioners and deferreds - DB & Derisking
Private equity and infrastructure group 3i has announced a £650m buy-in with Legal & General. The deal is the latest in a string to be completed by 3i’s defined benefit pension scheme since its first buy-in in 2017. The company announced it had begun an exercise to explore the possibility of a full buyout for the circa £1bn plan in its recently released annual report.
The defined benefit scheme of the British Bankers’ Association has entered into a £95m buy-in agreement with insurer Aviva, covering 213 members’ benefits. The comparatively slight transaction reveals ongoing appetite for bulk annuity insurers to write smaller contracts.
TWIA lifts Alamo Re 2020 cat bond target to $300m-$400m
The Texas Windstorm Insurance Association (TWIA) has lifted its target for the recently launched Alamo Re II Pte. Ltd. (Series 2020-1) catastrophe bond issuance, with as much as $400 million of reinsurance capacity from the capital markets now on the cards.
Covid-19 uncertainty could prolong trapping of ILS capital: RenRe
For insurance-linked securities (ILS) contracts and structures that have exposure to potential losses from the Covid-19 corornavirus pandemic, the chances are that their capital and collateral could be trapped for a prolonged duration, executives from RenaissanceRe have suggested.
Small scheme bulk annuity deals set for surge in demand
While the number of transactions under £100m fell by 30 per cent to 106 in 2019 from 150 in 2014, a sharp uptick in the number of schemes looking to take advantage of attractive insurer pricing has led LCP analysts to predict that 2020 will prove a strong year for smaller schemes.
"Pensions & Investments has reported more than $200 billion in defined benefit liabilities moving to insurers from plan sponsors over the past decade. The market has had more than 30 insurance companies participate. However, the majority of the buy-ins and buyouts have been concentrated in five insurers. In addition to liability transfers, more than $100 billion of longevity risk has been assumed by insurance companies. Prudential accounts for almost one-third of all activity."
Regulator to issue new guidance on capital-backed endgame deals
The UK Pensions Regulator is to issue new guidance on defined benefit employers seeking to use third-party investors to back the cost of buyout, following the completion of a first-of-a-kind "capital-backed journey plan" deal without the need for regulatory clearance. It is an agreement that enshrines at the outset a fixed cost to the sponsor, as well as a future date for the full buyout of benefits. Unlike "bridge to buyout" consolidator Clara Pensions, the link to the sponsoring employer is not cut.
TWIA's new Alamo Re 2020 cat bond doubles in size to $400m
The Texas Windstorm Insurance Association’s (TWIA) new Alamo Re II Pte. Ltd. (Series 2020-1) catastrophe bond issuance has successfully been doubled in size thanks to strong demand from investors and will now provide the residual market property insurer $400 million of reinsurance protection.
State Farm in $250m Merna Re II 2020-1 privately placed cat bond
U.S. primary insurance carrier State Farm has returned to the capital markets to source fully collateralised reinsurance again, sponsoring a new $250 million another privately placed and issued Merna Re II Ltd. (Series 2020-1) catastrophe bond transaction.
Avatar's new Casablanca Re cat bond sees 16%-18% price hike
Guide pricing for Avatar Property and Casualty Insurance Company’s new $65 million Casablanca Re Pte. Ltd. (Series 2020-1) catastrophe bond issuance has been hiked by 16%-18%, as insurance-linked securities (ILS) investors continue to demonstrate their requirement for higher returns and cat bond rates reflect the hardening Florida reinsurance market.
Achmea seeks $90m Windmill II Re cat bond to renew & upsize coverage
Dutch headquartered European market focused insurance group Achmea has returned to the catastrophe bond market to sponsor a roughly $90 million Windmill II Re DAC (2020) transaction, which will be the companies third cat bond transaction.
Avatar’s Casablanca Re cat bond amended to be issued at discount to par
Avatar Property and Casualty Insurance Company’s new $65 million Casablanca Re Pte. Ltd. (Series 2020-1) catastrophe bond issuance has been amended so that the notes will now be issued at a discount to par, with the implication being a higher premium being offered to investors, it seems.
This year's Insurance Linked Securities for Institutional Investors Report covers the impact that climate change is having on ILS and the way that investors are navigating this space in search of viable opportunities that can yield them net-positive returns.
Swiss Re targets $200m of hurricane retro with fifth Matterhorn Re cat bond
Swiss Re has again returned to the catastrophe bond market for what will be its fifth time in just around one-year, this time bringing a targeted $200 million Matterhorn Re Ltd. (Series 2020-4) with which it hopes to secure retrocessional protection against hurricane losses.
Fidelis' new Herbie Re cat bond hits $125m at top-end pricing
The new Herbie Re Ltd. (Series 2020-1) catastrophe bond transaction that is sponsored by specialty insurance and reinsurance firm Fidelis Insurance Holdings Limited has successfully been upsized by the target 25% to reach $125 million of coverage for the company.
Germany considers cat bonds to support pandemic risk fund: Reports
The insurance and reinsurance industry in Germany has reportedly come together to discuss and strategise the launching of a EUR 10 billion pandemic risk fund, to provide risk capital in the event of future pandemics, with insurance-linked securities (ILS) one of the funding avenues being explored, it has been reported.
Blue Halo Re 2020 cat bond target lifted to $150m at higher pricing
The target for the new Blue Halo Re Ltd. (Series 2020-1) catastrophe bond transaction from Allianz Risk Transfer has been lifted by 50% to $150 million, while the pricing has moved towards the upper-end of guidance.
Achmea looks to upsize its Windmill II Re cat bond by 25%
European insurer Achmea is hoping to increase the size of its new Windmill II Re DAC (2020) catastrophe bond transaction by as much as 25%, with the offering now targeting up to EUR 100 million (US $113m) of reinsurance protection for the company.
Avatar's Casablanca Re cat bond term shortened to one-year
The term of Avatar Property and Casualty Insurance Company’s latest catastrophe bond was shortened to one year just before its issuance, as the insurer settled for a single year of reinsurance coverage from the $65 million Casablanca Re Pte. Ltd. (Series 2020-1) transaction.
ILS funds shift to more remote layers & tighter terms in hard(er) market
As well as enhancing their returns thanks to rising pricing, insurance-linked securities (ILS) fund managers are seeking to capitalise on the hardening reinsurance and retrocession market in a number of other ways that could result in their portfolios delivering better returns and becoming less volatile.
Blue Halo Re cat bond target lifted again to $175m by Allianz ART
The target size for Allianz Risk Transfer’s (ART) new Blue Halo Re Ltd. (Series 2020-1) catastrophe bond transaction has been lifted again, with the deal now aiming to secure up to $175 million of retrocession for the firm’s portfolio and some of the tail risks related to the ILS fronting it undertakes. Also, the pricing has moved towards the upper-end of guidance.
Achmea aims for reduced Windmill II Re cat bond pricing
European insurer Achmea is aiming to secure slightly lower than anticipated pricing for its new Windmill II Re DAC (2020) catastrophe bond transaction, with the upsized EUR 100 million deal potentially set to come in with a slightly lower coupon now.
We Can Protect the Economy From Pandemics. Why Didn't We?
Pandemic insurance would have shifted at least some of COVID-19's economic costs onto investors who had willingly taken on the risk. But pandemic insurance policies are bot a panacea. There will be small businesses priced out of coverage, insurers who exploit every loophole to avoid claims, and corporate executives who enrich themselves and not their workers when they do receive payments. For example, the $425 million World Bank “pandemic bond” issued in 2017 has been criticized for failing to pay out quickly enough, and having needlessly complex triggers.
2019 Global Health Security Index found huge gaps in preparedness for epidemics and pandemics
The 2019 Global Health Security Index assessment suggested that not a single country in the world is fully prepared to handle an epidemic or pandemic. The average overall 2019 GHS Index score was slightly over 40%, and among the 60 highest-income countries assessed, the average score was 52%. Fewer than five percent of countries score in the highest tier in rapid response to and mitigation of spread of an epidemic. Having a sufficient and robust health sector to treat the sick and protect health workers was the lowest-scoring category (26.4). https://www.ghsindex.org/
The best way to manage a DB Scheme (Keating & Clacher)
Pension scheme liabilities should be calaculated as either the accrued value of contributions, or the discounted present value of the projected best estimate of the ultimate benefits using the contractual accrual rate. The scheme should be funded to the level of liabilities calculated in this manner, with assets being valued using market prices. However, this leaves the scheme exposed to the risk of sponsor insolvency when this level of funding is insufficient to purchase equivalent benefits in the open market or alternately, to run off the scheme. There is a solution to this risk – pension indemnity assurance; a specialised form of long term credit insurance.
Achmea gets 25% larger Windmill II Re cat bond at 11% reduction in pricing
European insurance group Achmea has successfully priced its new Windmill II Re DAC (2020) catastrophe bond transaction at the 25% upsized target of EUR 100 million and with the coupon pricing reduced by 11% over the course of the deal’s marketing.
First private cat bond issued from GC / MMC's Isosceles ILS platform
Marsh & McLennan Companies and reinsurance broker Guy Carpenter operated Isosceles Insurance Limited transformer and segregated cell structure has issued a single tranche featuring $16.445 million of Series 2020-A1 private ILS notes in a private placement to qualified investors. This is the first private insurance-linked securities (ILS) arrangement or catastrophe bond from the Isosceles platform.
MetLife enters UK longevity reinsurance market with PIC transaction
Metlife has entered the longevity reinsurance market in the United Kingdom, providing a longevity risk transfer arrangement for regular market participant Pension Insurance Corporation, to cover the longevity risk associated with roughly £280 million of pension liabilities for PIC.
Pensions superfunds given go-ahead in ‘tough’ security regime
The UK Pensions Regulator has approved a contentious system that will give companies a new way to offload the promises they have made to retirees. The new system will allow several defined benefit schemes to be collected together into so-called pensions superfunds. Supporters say these superfunds will offer employers and trustees more choice about what they do with their pension schemes. But critics say they will offer less security for scheme members compared with the alternative of passing the scheme to an insurance company. Deals with insurance companies are more expensive for scheme sponsors, because the insurers must comply with the EU’s strict Solvency II capital regulations. Insurers say this makes them more secure than superfunds.
