Category: Analysis

Retail investors – the third wave

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A new type of investor - the retail investor - is rapidly becoming a major force in the capitalisation of the reinsurance industry Following hurricane Katrina in 2005, over $5 billion was raised to create new reinsurance companies...

Bermuda – in the firing line (NASA’s Dr Tim Hall)

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Bermuda is a small target, but Atlantic hurricanes like to take shots at it, and Hurricane Gonzalo has good aim. Updated midday, October 15th 2014 Gonzalo, the sixth hurricane of the 2014 season, is currently a major hurricane (Saffir...

Cat bonds – not just cheap

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A more holistic analysis of cat bond transactions reveals more good news for sponsors. Risk adjusted cat bond yields have reduced significantly over the last few years. But the default probabilities calculated by cat models...

A Brief History of Cat Bond Prices

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An article that we wrote for the September 2014 issue Actuaries Magazine from the Australian Actuaries Institute. Download article The original InsuranceLinked articles A Brief History of  Cat Bond Prices Part 1 A Brief History of  Cat Bond Prices...

The silk road – ILS opportunities in China

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There has never been a cat bond in China but it is a leading candidate to be the next big thing in the ILS market. We spoke to Robert Wiest, the Head of Strategy & Operations Asia at Swiss Re. The United States dominates the...

Seasonal hurricane forecast map with NASA’s Dr Tim Hall

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The 2014 hurricane season continues to be well below long-term average by many measures. We are now about a week past the climatological peak in hurricane formation, and so far we’ve had 5 named storms, one major hurricane (Edouard), and no US...

Monte Carlo 2014 wrap up

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Every year, the reinsurance conference in Monte Carlo is accompanied by market analysis from key industry observers that sets the agenda for the next year. Here is our round up of what was said. Reinsurance broker, Guy Carpenter,...

ILS cheat sheet

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Reinsurance isn't complicated but it is full of jargon. The convergence of the reinsurance and asset management worlds has produced a strange mixture of terminology. For example, a fund can buy a cat bond and sell a reinsurance...

2014 hurricane update with NASA’s Dr Tim Hall

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It has been a quiet year for Atlantic hurricanes, and it is increasingly likely to stay that way. In the first of a series of columns, Dr Tim Hall from NASA forecasts reduced odds for US hurricane landfalls during the remainder of the season. There...

Shake up in the science of earthquakes

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The cat bond and reinsurance markets are likely to be affected by a new study by the US Geological Survey. It concludes that there is a higher risk of earthquakes in many parts of the US than was previously thought. For the sixth...

In the red

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Despite the lack of natural catastrophes, it has been a shaky start to the second half of the year for investors in reinsurance equity The dramatic rise of insurance linked funds has largely been driven by the success of one argument:...

The rise of the insurance linked fund

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An interactive map showing the growth of a new asset class For hundreds of years reinsurance was sold by reinsurers. In the early 2000s, a handful of specialist fund managers began to construct portfolios of catastrophe bonds on...

The next big thing

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The recent success of insurance linked funds at the expense of traditional reinsurers is just one example of how innovation is changing an old fashioned industry. New technology is having dramatic effects on many parts of the insurance market Harvard...

Sage advice

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Warren Buffett's warning that those charging inadequate premiums could wind up "getting creamed" has done little to dent ILS investors' enthusiasm. But with Munich Re's latest cat bond offering being withdrawn, are there signs that some...

Reading tea leaves

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Seasonal forecasters have offered few useful insights to the reinsurance market, but cat bond traders could use them to gain an edge Hurricanes in the Atlantic are the cause of the world’s largest risk to insured property. Every...

A brief history of cat bond prices – part two

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We take another look at how the history of cat bond prices might help to explain the current market and introduce a new interactive chart A few weeks ago we looked at how the pricing of US wind-exposed primary issues has changed...

Are we there yet?

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Does the recent increase in cat bond yields indicate that we have reached the bottom of the market? Probably not. Last week we used industry data to plot the 12 month trailing average price of US cat bonds and found that the return...

Letters | June 8 2014

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Dirk Lohmann, Chairman and Managing Partner of Sacquaero Advisors on last week’s article on long term cat bond prices Adam, With respect to your item on cat bond spreads and the last point in your article (quoted below) I would...

A brief history of cat bond prices – part one

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We analysed twelve years of data to try to  understand the causes of the big changes in the market price of catastrophe bonds Cat bond prices are at long term lows. This seems to be for at least three reasons – the broadening acceptance...