Category: Analysis

First quarter pricing update

Posted by on

The latest Industry Loss Warranty prices from Guy Carpenter indicate that US hurricane rates continued to slip in the first quarter, but recent weeks have shown an upward trend. The cat bond market is also showing signs of rate increases....

2015 could be another quiet year for hurricanes

Posted by on

In the two years 2004/2005 the US experienced seven 'major' hurricanes. There have been zero in the nine years since then. Early signs indicate that 2015 will be another relatively quiet year. NASA’s Dr. Tim Hall discusses the upcoming...

M&A – the long view

Posted by on

Last week's announcement that Endurance will be buying Montpelier was the fifth significant reinsurance deal in as many months. Assured Research, an insurance focused research firm, has analysed the data from the last 15 years of...

Cat bond pricing stabilises – for now

Posted by on

Data from recent deals indicates that catastrophe bond prices have stabilised over the last 12 months. Has the market finally reached the bottom or is it just pausing for breath? Cat bond spreads fell by close to 50% over two...

Perspectives – Lloyd Dixon, RAND Corporation

Posted by on

In the second of our two part series on terrorism, we spoke to Lloyd Dixon, senior economist at the global policy think tank, RAND. We asked him about the recent changes to the US terrorism insurance legislation, the Terrorism Risk Insurance...

Too many terrorists spoil the plot

Posted by on

As spies have become more sophisticated, terrorists have had to find new ways to terrorise people. The public has been surprised to discover the extent to which they are spied on by their own governments. But according to Dr Gordon...

Live from New York: SIFMA 2015

Posted by on

The leaders of the global ILS community are braving the New York freeze this week for the annual SIFMA conference. InsuranceLinked will be covering the event in a live blog. Last month was New York's coldest February since 1934....

Is bigger better?

Posted by on

The sudden burst of M&A activity has dominated the discussions on earnings calls over the last few weeks. Veteran insurance investor, Nick Martin, looks at whether increased scale will be enough for reinsurers to succeed in a challenging...

One plus one equals?

Posted by on

More reinsurance M&A is forecast for 2015 as traditional players take increasingly radical steps to address the challenging market conditions. Will the combined entities be greater than the sum of their parts? "It’s beginning...

Perspectives – Lixin Zeng CEO, AlphaCat Managers

Posted by on

A conversation with the head of Validus Group's fund management business. Validus was established in 2005 during the recapitalisation of the reinsurance industry that followed Hurricane Katrina. It has enjoyed considerable success...

A turbulent year

Posted by on

Insurers are anticipating that 2014 will be the most expensive year for the aviation market since 2001 and global air travel is likely to double again by 2030. Could this be an opportunity for the capital markets? Over the last...

The fundamental interconnectedness of things

Posted by on

On Saturday, global leaders flew home from the World Economic Forum at Davos where they were debating the big issues of 2015. The increasing interconnectedness of global risks was high on their agenda The graphic below shows the...

Do catastrophe models understand insurance?

Posted by on

Catastrophe models are complex but not nearly as complex as reality. A simplistic description of insurance policies limits the accuracy of risk analyses The risk of an insurance portfolio is calculated by taking...

Still falling

Posted by on

The second part of our review of pricing levels looks at metrics from the January 2015 renewal season and finds that rates are still falling for all types of property reinsurance in every region. Last week's article looked at some...

How much?

Posted by on

A quantitative review of how far cat bond returns have fallen We start the year with a two part review of pricing trends in 2014. This week we look at the ILS market. Next week we will examine what has happened in the reinsurance...

2014 – the convergence market, converged

Posted by on

Our Christmas quiz and a look back at 2014 2014 was the year that the convergence market converged. Most large insurance companies – and many smaller ones – now use reinsurance and catastrophe bonds interchangeably. In recent...

What happened to all the hurricanes?

Posted by on

In just two years (2004-2005) the United States experienced seven major hurricanes. In the nine years since then, not one major hurricane has made landfall in the US - the longest gap since records began. In an upcoming paper, NASA's Dr...

Stuff happens

Posted by on

Robert Medeiros predicts some of the things that the models will get wrong when the next US hurricane happens Modern catastrophe models can generate probabilistic loss estimates to the nearest cent, but unquantifiable factors...

A good time to buy insurance shares?

Posted by on

Insurance giant, Travelers, has issued $1.55 billion of catastrophe bonds since 2007 to help reduce its hedging costs. Veteran insurance investor, Nick Martin, finds that while reinsurance rates have fallen dramatically in recent years, the...

Live Blog: ILS Convergence 2014

Posted by on

This week sees the second ILS Convergence event get underway in Hamilton, Bermuda. InsuranceLinked will be covering the event in a live blog. Billionaire Roman Abramovich seemed to be going to extraordinary lengths to get a ticket...

Back to the future

Posted by on

Reinsurers and ILS funds are increasingly gloomy as they struggle to see what could save them from further rate deterioration. But this is not the first time that the industry has faced seemingly hopeless market conditions. We look back...

A tale of two storms

Posted by on

Bermuda was hammered by two tropical cyclones in less than a week, Fay and Gonzalo. But hitting Bermuda was one of the few things the storms had in common. Fay was a “messy” storm: gusty, broad, asymmetric, and not well forecast....

Reinsurance returns – lower and lower

Posted by on

The latest pricing data indicates that returns have slipped further for both the cat bond and reinsurance markets The third quarter has not been an active one for new reinsurance deals or cat bond issuance - both markets...