Category: Analysis

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....

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...

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 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...

A conversation with Goldman's Global Head of Structured Finance Michael Millette was one of the founders of the Goldman Sachs insurance linked securities business. Since joining the firm in 1994, he has worked on many of the market’s...

A waterspout off Castle Harbour, Bermuda on 29 September 2014. ...

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...

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...

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...

Jason Carne runs the ILS group for KPMG Bermuda. His team provides a range of services for cat bonds, insurance linked funds as well as traditional reinsurers. This gives him a unique perspective on the new capital that has entered the...

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...

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,...

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...

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...

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...

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:...

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...

A conversation with the head of Montpelier's third party platform group Bermuda reinsurer, Montpelier Re, established an asset manager in 2012. It manages a variety of vehicles including funds that are listed on the New York and...

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...

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...

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...

July 1 is the final opportunity for most insurers to buy reinsurance protection. This year's mid-year market has felt the effects of the changing capital landscape The influx of non-traditional capacity and reduction in ILS pricing...

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...

A conversation with RMS’s head scientist about why water is the new wind when it comes to hurricane risk This week we spoke to RMS’s Chief Research Officer, Robert Muir-Wood, about the latest advances in storm...

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...