Hedge fund reinsurer Third Point Re has reported a net loss of $14.7m for the fourth quarter of 2014 and a 77.8% drop in full-year income to $50.4m. Chairman and CEO John Berger blamed the disappointing result on challenging investment market conditions. As a result, Third Point Re is winding down it ILS fund, also citing competition with other collateralised reinsurance and ILS vehicles.
Third Point Re
The California Earthquake Authority is moving ahead with plans to transfer more of its catastrophe risk into the private market with staff arguing “additional risk transfer diversification” is needed. Citing 2015 risk transfer expenses of $210m, a staff board presentation said that a larger chunk of its $11.8 billion in claims paying capacity may be able to be packaged into catastrophe bonds or other private market solutions.
Risk Market News
Growing for the sake of garnering market share, or for the sake of simply getting bigger, can lead to disastrous outcomes when the wind blows and the earth shakes, warns AM Best in a new report. But it also notes that not realizing or accepting that the market is becoming more challenging and ignoring the need to find suitable alternatives in order to remain relevant could turn into a less than ideal situation for some.
Floridian insurer Universal Insurance Holdings has revealed plans to drop its quota share reinsurance cover in the June 2015 renewals. The firm said it was able to drop the cover as of result of the $19m investment in the company made by Nephila Capital last year, combined with its healthy balance sheet.
UK-based insurer RSA has bought £150m ($231m) of aggregate reinsurance cover for 2015, which attaches when retained losses exceed £180m ($277m). It also revealed retentions within its property risk treaty and non-UK cat programme are up from £25m to £50m. Layers within its reinsurance programme provide up to £1.6bn ($2.3bn) of cover for the UK and Europe and up to C$3.1bn ($2.48bn) for Canada.
Reinsurance broker Cooper Gay Swett & Crawford has expanded its North American convergence team. William Ludington is tasked with accessing alternative sources of insurance capital via structured products such as cat bonds and ILS.
Cooper Gay Swett & Crawford
US winter storm losses are racking up after at least 90 inches of snow fell across New England over the past 30 days. Economists estimate the winter weather conditions have cost the state of Massachusetts over $1 billion in lost business activity, according to AM Best. The activities of claims adjusters are being monitored closely notes the rating agency.
Insured losses in 2014 were at the lowest level seen since 2009, according to Guy Carpenter. The reinsurance broker found that significant insured losses in 2014 totalled approximately $33bn, a dramatic drop when compared to the historic insured losses seen in 2011, which totalled approximately $126bn. Notable insured losses from last year included Japan snowstorms, hail and windstorms in Europe and severe flooding in the UK as well as a cold and stormy winter in the US.
Two severe tropic cyclones made landfall in Australia within a 24 hour period. The second, Category 5 Marcia hit the coast of Queensland, resulted in power outages, travel disruption and economic impact. The Insurance Council of Australia has revealed 8,950 claims have been lodged with estimated insurance losses at A$53.4m ($41.7m).
Insurance Council of Australia
Posted: Monday, March 2nd, 2015