News review | April 16 2018

UPC's Armor Re II cat bond has priced 17.7 percent below the midpoint of the initial spread guidance at 350 basis points. Final sizing for the deal, which will provide US east coast cover against wind and quake risk for the Florida-based insurer, has remained fixed at $100m. The cat bond has an indemnity cascading per-occurrence trigger.
Trading Risk

Commercial property insurance rate increases are easing off initial spikes following 2017’s record natural catastrophe (cat) losses, according to Willis Towers Watson. Overall, the property/casualty marketplace remains well capitalised, buoyed by the strong appetite of alternative capital providers. The ability for the industry to recover and recapitalise swiftly following 2017’s record natural cat losses — without widespread hardening or any insurer insolvencies — demonstrates a new level of resilience, said Joe Peiser, head of Broking, North America.
Willis Towers Watson

Sovereign wealth fund assets jumped 13 percent year-on-year to $7.45 trillion in March 2018. SWF appetite for alternative assets has continued to grow, with 76 percent of funds now investing in at least one alternative asset class, up from 74 percent in 2017. SWFs now account for at least 15 percent of the global alternatives market, according to a recent report from State Street Global Advisors. Norway’s oil-backed Government Pension Fund Global is still the largest SWF in the world, with total assets of $1.06 trillion.

The CCRIF is looking at ways to scale up its facility to better cover catastrophe risk across the Caribbean following last year’s devastating hurricane season. The damage inflicted by Hurricanes Maria and Irma resulted in payouts of $55m to nine member governments. CCRIF CEO Isaac Anthony said: “The impacts of climate change are increasingly affecting CCRIF’s Caribbean and Central American member countries. [We must] develop solutions to address common challenges in keeping with the spirit of innovation and building a resilient Caribbean.”
Caribbean Catastrophe Risk Insurance Facility

AIR Worldwide is collaborating with RenaissanceRe to model long-tail casualty risk. AIR is producing portfolio-specific casualty losses based on its exposure management application, Arium. “The model of liability risk [will] help companies understand the complex interconnections in their portfolios, resulting in a comprehensive assessment of potential future losses,” said Dr Jay Guin, chief research officer, AIR Worldwide.
AIR Worldwide

Total global economic losses from natural and man-made disasters in 2017 were $337 billion, almost double the losses in 2016 and the second highest on record, according to the latest sigma study. Global insured losses from catastrophe events, meanwhile, were $144 billion, the highest-ever recorded in a single year. The highest losses came from three hurricanes – Harvey, Irma and Maria (HIM) – resulting in combined insured losses of $92 billion, making 2017 the second costliest North Atlantic hurricane season since 2005.
Swiss Re Sigma

Total combined economic damage from the winter storms and severe weather in the US March is forecast to reach $3 billion, with public and private insurers expected to cover roughly two-thirds of the cost, according to Impact Forecasting. A series of winter storms during the month led to widespread damage across more than a dozen states as well as the first notable 2018 severe weather outbreak, which included the first EF3 tornado touchdown in the country for a record 306 days.
Aon Benfield

Posted: Monday, April 16th, 2018