ART

American Family Mutual Insurance Company is targeting an upsized $175 million of collateralized multi-peril reinsurance from its Four Lakes Re Ltd. (Series 2020-1) CAT bond issuance, the carriers first cat bond in a decade. When it launched in October the target size was $150 million across the two tranches of three-year notes, originally a $75 million Class A tranche (now $100 million) and the riskier Class B tranche of notes (still $75 million).

The Marks and Spencer (M&S) Pension Scheme has completed two buy-ins with Aviva and Phoenix, insuring a total of £750m of benefits. It is the scheme's second buy-in with Aviva, and the third with Phoenix, resulting in around 30%, or £3.7bn, of pensioner liabilities now being insured. Aviva secured around £390m of the liabilities and Phoenix around £360m, with both transactions benefitting from umbrella contracts, which allow for quick decision-making to take advantage of favourable market conditions.

The defined benefit scheme for senior management at defunct retailer BHS has bought out its benefits, allowing the plan to exit the Pension Protection Fund’s assessment period. The £2.5m deal with Legal & General sees another cohort of employees achieve a ‘PPF-plus’ level of benefits, two years after 9,000 members of the BHS2 pension scheme had bulk annuities purchased for them with the Pension Insurance Corporation.

So far in 2020, Artemis.bm has recorded 68 catastrophe (CAT) bonds and related insurance-linked securities (ILS) issues, breaking the previous annual record set in 2018. In terms of the dollar value, the total for 2020 stands at almost $13.5 billion, which is closing fast on the 2018 record of almost $13.9 billion. Excluding all mortgage ILS issuance though, which has become an increasing component of the overall marketplace as mortgage insurers look to the capital markets for reinsurance capacity, issuance still remains some way below the 2017 record of almost $12 billion.

Allied World Assurance Company (AWAC) is set to sponsor its first ever catastrophe bond; a $150 million multi-year single-tranche multi-peril transaction. The 2001 CAT Re Ltd. (Series 2020-1) notes will provide coverage against losses from U.S named storm, U.S. earthquake, U.S. severe thunderstorm and European windstorm risks.

The life settlements market will not be immune to the effects of the global COVID-19 pandemic, according to investment management consultancy Conning, but this won’t hinder it from achieving continued growth the company said.

Google parent Alphabet has entered the catastrophe (CAT) bond market for the first time, as the technology giant seeks $237.5 million of California earthquake insurance protection that will be fully collateralized through the issuance of a Phoenician Re Ltd. (Series 2020-1) single-tranche three-year CAT bond. The proceeds will collateralize retrocessional reinsurance agreements with fronting reinsurer Hannover Re. Hannover Re will in turn enter into a reinsurance agreement with Imi Assurance, which is Google’s Hawaii domiciled captive insurer.

Pacific Life Re completed a £3.7 billion longevity swap transaction for the Prudential Staff Pension Scheme. It was structured using a Guernsey-based captive, which enables the cover to be passed through to the pension beneficiary without the need for an intermediating private insurer while the reinsurance capital can be used to back the risk more directly. The cell then enters into a reinsurance agreement with the reinsurer.

Allied World Assurance Company (AWAC) is set to sponsor its first ever catastrophe bond; a $200 million multi-year single-tranche multi-peril transaction. The 2001 CAT Re Ltd. (Series 2020-1) notes will provide coverage against losses from U.S named storm, U.S. earthquake, U.S. severe thunderstorm and European windstorm risks. It had originally been set at $150 million, but was increased due to strong investor appetite.

Having already increased the target size of its first catastrophe bond by one-third, Allied World Assurance Company (AWAC), a global insurance and reinsurance company and part of the Fairfax Financial group, has now lifted the target a little more, with the latest marketed size of the 2001 CAT Re Ltd. (Series 2020-1)  transaction now $210 million.

Allied World Assurance Company (AWAC) is set to sponsor its first ever catastrophe bond; a $210 million multi-year single-tranche multi-peril transaction. The 2001 CAT Re Ltd. (Series 2020-1) notes will provide coverage against losses from U.S named storm, U.S. earthquake, U.S. severe thunderstorm and European windstorm risks. It had originally been set at $150 million, but was increased due to strong investor appetite, although the pricing has been fixed at the low-end of initial guidance.

The UK could face a tidal wave of insolvencies and job losses in the coming winter months. With this bleak prospect looming, pension professionals are calling for a more pragmatic approach from the Pensions Regulator on scheme funding. The Pensions Regulator issued lengthy guidance to trustees on dealing with sponsors in distress on Thursday. But a survey of pension professionals conducted before the new publication stressed the need for more concrete action to protect affordability, rather than just clarifying best practice when a sponsor nears insolvency.

Swiss Re has returned to the catastrophe bond market for what will be its fifth transaction of 2020 and its sixth in total under the Matterhorn Re program, with a $150 million U.S. named storm focused two-year two-tranche Matterhorn Re Ltd. (Series 2020-5) deal. The two equal-sized tranches differ slightly in terms of regions covered, making one slightly riskier than the other due to the inclusion of southern and Gulf Coast states, plus Florida.

AXIS Capital, the Bermuda headquartered global specialty insurance and reinsurance firm, has returned to the catastrophe bond market for the first time this year, with a target for an at least $100 million Northshore Re II Ltd. (Series 2021-1) three-year note issuance. Coverage will be for U.S. named storms (inc. Puerto Rico & Virgin Islands), U.S. & Canada earthquake risks and European windstorm risks.

Catastrophe bond and related insurance-linked securities (ILS) issuance has already reached a new annual record in 2020, exceeding $14 billion for the very first time. Aso, the amount of risk capital outstandingThis has surpassed $45 billion for the first time and is currently fast approaching $45.6 billion, the highest figure seen since Artemis.bm has been tracking this marketplace in the late 1990’s.

Specialty insurance and reinsurance player Brit is entering the catastrophe bond market for its first full 144a deal and is utilising its UK domiciled multi-use collateralised reinsurance PCC vehicle, Sussex Capital UK PCC Limited, for the single-tranche $250 million U.S. multi-peril Sussex Capital UK PCC Limited (Series 2020-1) issuance. It will cover certain losses from U.S. named storms and U.S. earthquakes, with coverage including Puerto Rico and the U.S. Virgin Islands across a four year term to the end of 2024.

The first catastrophe bond to be sponsored directly for the benefit of Google holding company Alphabet, has now been priced on-target at the mid-point of guidance, while the single-tranche Phoenician Re Ltd. (Series 2020-1) CAT bond transaction will close at the same $237.5 million size it launched at. The Class A notes will provide Alphabet with a source of California earthquake insurance protection, cascaded down using the reinsurance agreements, through its captive insurer and Hannover Re, across a three-year term.

Aviva Life & Pensions UK has completed an £875m buy-in with its parent company’s defined benefit pension scheme, covering around 2,800 members’ pension liabilities. This is the Aviva Staff Pension Scheme’s second buy-in with Aviva after a £1.7bn buy-in in 2019 and a £5bn longevity swap in 2014. Of the approximately 2,800 members covered under the deal, around 2,100 are deferred members and 700 are current pensioner members.

Liberty Mutual has returned to the catastrophe bond market for the first time since 2012, as the company seeks a $200 million source of catastrophe reinsurance from the capital markets by sponsoring a three-year multi-peril single-tranche Mystic Re IV Ltd. (Series 2021-1) transaction. It will cover certain losses from U.S. named storms and U.S. & Canada earthquakes, with the covered area including Puerto Rico, DC and the U.S. Virgin Islands, on a per-occurrence basis and using an industry loss trigger.

AXIS Capital has increased the size of its latest catastrophe bond issuance by 50%, as the three-year multi-peril Northshore Re II Ltd. (Series 2021-1) transaction is now set to complete at $150 million in size, with pricing now been fixed below the initial guidance. The protection will be on a weighted industry loss index trigger and annual aggregate basis, covering U.S. named storms (inc. Puerto Rico & Virgin Islands), U.S. & Canada earthquake risks and European windstorm risks.

Google holding company Alphabet, Inc. has returned to the catastrophe bond market in very quick succession to add a second $95 million Phoenician Re Ltd. (Series 2020-2) transaction. Hannover Re will again enter into retrocessional agreements with the SPI, in turn providing the reinsurance cover to Alphabet’s Hawaii domiciled captive insurer Imi Assurance, who in turn provides the insurance coverage to Alphabet. It covers California earthquakes across a three-year term and using an indemnity trigger on a per-occurrence basis.

The UK Court of Appeal has overturned a High Court ruling that blocked the transfer of £12bn of annuities from Prudential, now M&G, to Rothesay Life. The Court of Appeal rejected every one of the previous judge’s objections to the transfer, and therefore the High Court will now have to review the transaction. In March 2018, Prudential announced its plan to sell £12bn of annuities to derisking expert Rothesay Life, covering 400,000 policies. But in August 2019, a High Court judge blocked the sale — otherwise known as a Part VII transfer — which raised concerns around other such deals in the annuities market in the future.

ARX Holding, the Progressive-owned parent of American Strategic Insurance Group, has returned to the catastrophe bond market for the second time this year, to sponsor a $100 million or greater sized three-tranche Bonanza Re Ltd. (Series 2020-2) issuance.

Specialty insurance and reinsurance player Brit is the latest to target an upsizing of its first catastrophe bond issuance, as the firms Sussex Capital UK PCC Limited (Series 2020-1) transaction now has an increased target size of $300 million. Brit is utilising its UK domiciled multi-use collateralised reinsurance PCC vehicle, Sussex Capital UK PCC Limited, for the single-tranche $250 million U.S. multi-peril Sussex Capital UK PCC Limited (Series 2020-1) issuance. It will cover certain losses from U.S. named storms and U.S. earthquakes, with coverage including Puerto Rico and the U.S. Virgin Islands across a four year term to the end of 2024.

Bermuda based insurance and reinsurance holding company Hamilton, is entering the catastrophe bond market for its first full, syndicated Rule 144a transaction using its newly incorporated Easton Re Pte. Ltd. special purpose reinsurance vehicle domiciled in Singapore. Easton Re Pte. is targeting to issue at least $150 million of Series 2020-1 Class A notes covering losses from U.S. named storms and earthquakes, across three years, on a state weighted industry loss and per-occurrence trigger basis.

The second catastrophe bond issuance from Alphabet, the holding company for Google and its units, has now been priced and the coupon for the $95 million Phoenician Re Ltd. (Series 2020-2) transaction has been fixed above the mid-point of guidance. Hannover Re will again enter into retrocessional agreements with the SPI, in turn providing the reinsurance cover to Alphabet’s Hawaii domiciled captive insurer Imi Assurance, who in turn provides the insurance coverage to Alphabet. It covers California earthquakes across a three-year term and using an indemnity trigger on a per-occurrence basis.

The UK Pensions Regulator (TPR) has stood by its new defined benefit funding code following criticisms from open DB schemes, arguing that a bespoke route will allow these pension funds to continue their current risky investment strategies. It explained that it is reasonable to give immature schemes — such as open DB pension funds — “room to invest in more volatile, but higher return-seeking assets”. However, trustees of open schemes should be able to evidence to TPR how they could “manage the risk of their scheme closing or maturing faster than expected”

The first ever parametric solely wildfire exposed catastrophe bond to hit the market, the $50 million Power Protective Re Ltd. (Series 2020-1) transaction being sponsored on behalf of a municipal water utility operating in the Los Angeles area, has seen its pricing move up by around 9% before it closed. The municipal utility entered the catastrophe bond market to secure insurance coverage against wildfire risks in the region of California where it operates, as its infrastructure is exposed to wildfires.

At the tail end of what has been the second biggest year ever for derisking transactions, engineering services group Renew Holdings completed a £110m buy-in with Rothesay Life for its Lovell Pension Scheme. The deal, finalised on November 26, eliminated all of Renew’s exposure to investment and funding risks in the scheme. Following this buy-in, and previous transactions in 2011 and 2016, all of the defined benefit scheme’s liabilities will now be matched with corresponding annuities.

Liberty Mutual upsized its three-year multi-peril single-tranche Mystic Re IV Ltd. (Series 2021-1) transaction from $200 million to $300 million. It will cover certain losses from U.S. named storms and U.S. & Canada earthquakes, with the covered area including Puerto Rico, DC and the U.S. Virgin Islands, on a per-occurrence basis and using an industry loss trigger. They were first offered to cat bond funds and investors with coupon price guidance in a range from 9.25% to 10%, but guidance has now narrowed and fallen, with an amended range of 9% to 9.25% now offered.