Everest Re aims to upsize Kilimanjaro III Re cat bond to $300m
"Global insurance and reinsurance company Everest Re is aiming to upsize its latest catastrophe bond issuance, with the new Kilimanjaro III Re Ltd. (Series 2022-1) transaction now targeting $300 million in industry loss based aggregate retrocession for the company."
The House of Fraser Beatties & Jenners Pension Scheme has completed a £600 million buyout with Pension Insurance Corporation. The scheme’s sponsor, House of Fraser, went into administration in 2018. Consequently, the pension fund entered a Pension Protection Fund assessment period following the voluntary liquidation of the remaining employer.
Everest Re gets new cat bond at $300m with mid-point pricing
Everest Re issued $300 million Kilimanjaro III Re Ltd. (Series 2022-1) single-tranche three-year CAT bonds (versus the original $250 million target). They will cover certain losses from named storms and earthquakes that impact the United States, Puerto Rico, U.S. Virgin Islands, D.C., and Canada, on an industry-loss trigger basis.
The Hanover gets debut cat bond at upsized $150m, low-end price
Hanover Insurance Group issued $150 million Commonwealth Re Ltd. (Series 2022-1) single-tranche three-year CAT bonds (versus the original $100 million target). They will cover certain losses from named storms across northeast US states on a per-occurrence and indemnity trigger basis.
Total pension scheme buy-in and buyout volumes totaled £27.7 billion in 2021, latest Hymans Robertson analysis reveals. There were at least 39 deals in excess of £200 million, of which at least 14 were over £500 million. There were also four significant longevity swaps conducted in 2021 - deals that totaled £15.3 billion.
AXIS lifts Northshore Re II cat bond target to $140m at lower pricing
"AXIS Capital, the global specialty insurance and reinsurance underwriter, is now aiming to secure an upsized $140 million of peak-peril catastrophe reinsurance protection from its new Northshore Re II Ltd. (Series 2022-1) catastrophe bond issuance."
AXIS gets $140m Northshore Re II cat bond at reduced pricing
AXIS Capital issued $140 million Northshore Re II Ltd. (Series 2022-1) single-tranche three-year CAT bonds (versus the $100 million+ target). They will cover annual aggregate losses from US named storms (including Puerto Rico & Virgin Islands), and U.S. and Canada earthquakes on a weighted industry loss trigger basis.
State Farm gets $500m reinsurance with new Merna Re II cat bonds
State Farm issued $200 million Merna Re II Ltd. (Series 2022-2) and $300 million Merna Re II Ltd. (Series 2022-3) of single-tranche three-year CAT bonds. Both cover US property catastrophe losses on an indemnity trigger and we expect per-occurrence basis.
Canopius gets first cat bond, Finca Re, at $75m with top-end pricing
Canopius Group issued $75 million Finca Re Ltd. (Series 2022-1) single-tranche three-year CAT bonds. It will cover losses from US named storms and earthquakes (including Puerto Rico and the US Virgin Islands) on an annual aggregate weighted industry loss trigger basis.
Smiths Group fund completes £640m buy-in with Rothesay
"The TI Group Pension Scheme, a Smiths Group-sponsored scheme, has secured a £640 million buy-in with Rothesay. The transaction protects the pension benefits of around 800 pensioners and 7,950 deferred members. The buy-in - which is the scheme's seventh bulk annuity transaction, and the third insured with Rothesay - insures the final tranche of its liabilities and completes its de-risking journey."
Alternative capital rebounds to record $97bn (again): Aon
Alternative capital levels in reinsurance, largely in insurance-linked securities (ILS) formats, have rebounded to their previous high-level of $97 billion, according to Aon. Overall, global reinsurance capital fell $30 billion to $645 billion as of March 31st, but ILS capital, grew by $1 billion, to end the first-quarter of 2022 back at its high of $97 billion again.
UBS expands pension longevity swap to £1.9bn with Zurich & Canada Life Re
The UBS (UK) Pension and Life Assurance Scheme has added another £500 million to an in-force longevity swap arrangement, expanding it to provide £1.9 billion of protection. As in the previous $1.4 billion transaction, Zurich Insurance Group acted as the insurer and Canada Life Re provided reinsurance capital. Roughly half of the new tranche relates to deferred members over age 60, which is a first for the longevity risk transfer market.
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GC / MMC’s Isosceles ILS platform in $90.5m private cat bond issuance
Isosceles Insurance, the Bermuda-domiciled private insurance-linked securities and CAT bond platform operated by Marsh McLennan and Guy Carpenter privately issued three new series of one-year CAT bond notes, totaling $90.5 million across the three series and five tranches. All have been structured as discounted zero coupon participating notes.
Buy-in and buy-out volumes £10-£12bn in the first half of 2022
Total U.K. buy-in and buyout volumes are on track to reach £35 billion by the close of the year, up more than 25% from £27.7 billion registered in 2021, according to Hymans Robertson. “The rapid growth in demand for pension schemes to insure their risks, along with improved pension scheme funding levels, attractive insurer pricing and new alternative risk transfer options, means that we expect a record breaking year for buy-ins and buy-outs in 2023. This is likely to exceed the £44 billion that we saw in 2019. We also expect around £50 billion a year of buy-ins and buy-outs on average over the next 10 years, in addition to longevity swaps."
EDS scheme secures £1.1bn full buy-in - DB & Derisking
"The £1.5 billion EDS 1994 Pension Scheme has secured a £1.1 billion full buy-in with Pension Insurance Corporation. The deal covers all of the scheme’s 3,000 pensioners and 2,300 deferred pensioners, and has been concluded in anticipation of a full buyout."
Further extension for some Hannover Re Seaside Re private cat bonds
"The maturity dates have been extended again for some of the Seaside Re private catastrophe bond transactions that were issued by German reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd., while two series of previously extended notes have now been allowed to mature."
Caribbean regional cat bond planned with World Bank support
Work is underway to develop a CAT bond for the Caribbean region with the support of the World Bank, with four countries currently engaged. The initiative hopes to have it ready for market by the time 2021 Jamaica’s landmark cat bond is due for maturity, at the end of 2023. It seems there is good support from Jamaica for bringing its catastrophe bond coverage together with three or more other Caribbean countries, to provide a more regional protection.
Arch Capital’s Voussoir Re sidecar in another preferred share issuance
The Arch Capital Group sponsored collateralized reinsurance sidecar style special purpose insurance (SPI) vehicle Voussoir Re Ltd. has made another issuance of shares, the third so far during 2022. As ever with this kind of private insurance-linked securities (ILS) transaction, details are scarce, so the exact structure and underlying risks associated with this issuance is unknown.
The Sappi UK Pension Scheme has completed a full £150 million buy-in with Phoenix Group subsidiary Standard Life, securing the benefits of all 1,300 scheme members. Prior to the buy-in the scheme’s strategic asset allocation stood at 87.5% matching portfolio — consisting of liability-driven investments and synthetic credit — and a 12.5% growth portfolio.
Medway Packaging scheme completes full £52mn buy-in
The Medway Packaging Pension Scheme has completed a full buy-in with Pension Insurance Corporation covering £52 million of liabilities. The deal covers the liabilities of the scheme’s 425 pensioners and 150 deferred members.
Sovereign Climate Debt Instruments: An Overview of the Green and Catastrophe Bond Markets
According to an IMF staff climate note, CAT bonds have become one the most prominent innovations in the field of sustainable finance in the last fifteen years. Yet, the issuances at the sovereign level have been relatively recent and not well documented in the literature. The note discusses the benefits of issuing these instruments as well as practical implementation challenges impairing the scaling-up of these markets. The issuance of these instruments could provide an additional source of stable financing with more favorable market access conditions, mitigate the stress of climate risks on public finances and facilitate the transition to greener low-carbon economies. Emerging market and developing economies stand to benefit the most from these financial innovations.
W. R. Berkley expands Lifson Re sidecar in H1 2022
"Insurance holding company W. R. Berkley Corporation has significantly expanded its use of the Lifson Re collateralized reinsurance sidecar vehicle during the first-half of 2022, ceding much more in the way of premiums to investors through the structure."
Lloyd's new LB2 ILS structure brings flexibility the market wants
The Lloyd’s of London insurance and reinsurance market has announced a new insurance-linked securities (ILS) structure that brings greater flexibility to the way Lloyd’s participants can access the capital markets and investors access risk from underwriters in the market. The new structure, London Bridge 2 PCC, is an entirely new protected cell company, established to have much broader permissions for ILS business and so give greater flexibility and optionality to the market and investors.
Hannover Re’s mortality swap recovery hits EUR88m on COVID impacts
"Hannover Re benefited from an increased recovery under its long-standing capital markets backed mortality swap arrangement by the end of the first-half of 2022, with the financial benefit from the retro hedge reaching EUR 88 million by the end of the period."
Weston's Marlin Re catastrophe bond issuance never completed
It turns out that Marlin Re pulled their 45 million issue of Marlin Re Ltd. (Series 2022-1) single-tranche two-year CAT bonds (that started as a $70 million three-tranche one- and two-year deal). It was to cover Weston Property and Casualty Insurance Company's losses from named storm in Florida, Louisiana, Mississippi, Texas and South Carolina, on an indemnity and per-occurrence basis. (It could have something to do with Weston's insolvency after the regulator initiated delinquency proceedings against it!?)
"According to the plan’s last updated statement of investment principles, prior to the buy-in, the trustees of the fund followed a broad liability-driven investment approach, holding a number of pooled funds investing in fixed income, cash and derivatives."
