The use of PCS data in 2017 catastrophe bond issuance increased by 77% to $5.3 billion when compared with the previous year, as total issuance broke records, according to analysis from Property Claim Services (PCS), a Verisk Analytics company. Excluding cat bond lite transactions, private cat bonds, and transactions focused on lines outside property, PCS puts full-year 2017 catastrophe bond issuance at $10.5 billion, which is the first time in the market’s history the $10 billion issuance threshold has been breached in a single year.
Property Claim Services
Reinsurance giant Munich Re has sponsored a second issuance for 2018 from its latest collateralised reinsurance sidecar, with a $216.34m tranche of Series 2018-1 Class B participating notes issued by its Eden Re II sidecar vehicle, taking the total size of the 2018 issuance to $300m. This is marginally downsized from the sidecar's average of $360m over the previous three years.
The ILS market showed resilience during the catastrophe losses in the second half of 2017, comfortably weathering the first major test for a number of funds with investors prepared to recapitalise funds and provide liquidity for trapped capital, according to Willis Re. Pricing corrections at the 1 January 2018 renewals did not see a significant spike due to the combination of strong capitalisation - with the ILS market now at $75 billion - losses being split over a number of events and a large retention by the primary market.
Willis Towers Watson
Nephila Capital wrote total limit of $1bn on AIG's expanded catastrophe reinsurance programmes for 2018. AIG has moved to reverse cutbacks to its reinsurance buying in recent years by placing a new $2bn aggregate catastrophe cover. It placed a $2bn xs $2bn reinstateable occurrence cover for its US book, which was restructured from the $3bn xs $1.5bn one-shot treaty that was in place last year.
JLT Re’s Risk-Adjusted Global Property-Catastrophe Reinsurance Rate-on-Line (ROL) Index rose by 4.8% at 1 January 2018, with levels still below those seen in 2016. The highest increases were recorded in the US, with rates renewing flat to up 5% for loss-free programmes and up 10% to 20% for loss-affected business. Flat to moderately up renewals were typical for international property-catastrophe business, reflecting more benign loss activity in Europe and Asia.
The hurricane trio of Harvey, Irma and Maria will cost the insurance industry a record amount in 2017: the final insurance bill for those and other natural catastrophes, including a severe earthquake in Mexico, is expected to come to $135bn – higher than ever before - according to Munich Re. Overall economic losses amounted to $330bn, the second-highest figure ever recorded for natural disasters. The only costlier year so far was 2011.
PERILS AG has disclosed its second loss estimate for Windstorm Xavier which affected Germany on 5 October 2017. The revised estimate of the property insurance market loss is €325m, compared to the initial loss estimate of €291m which was issued by PERILS on 16 November 2017.
Posted: Monday, January 8th, 2018