News review | March 04 2019

Pool Re, Britain’s state-backed terrorism reinsurer, has completed placement of its £2.3 billion retrocession programme with more than 50 international reinsurers. The £2.3 billion includes £75m provided under Pool Re’s terrorism catastrophe bond. The cat bond provides multi-year, indemnity retrocession protection for terrorism risk in the UK and breaks new ground on multiple fronts. It is the first to transfer standalone terrorism risk to the ILS market, the first ever issuance in sterling and the first issuance to use Computational Fluid Dynamic modelling for the risk analysis.
Pool Re

The first catastrophe bond has been issued out of Singapore. The bond, sponsored by Insurance Australia Group (IAG) as part of its 2019 catastrophe aggregate reinsurance cover, represents the first such transaction by the company. It provides IAG with AUD$75m of annual aggregate catastrophe protection for three years and is part of its aggregate sideways cover.
GC Securities

UnipolSai Assicurazioni has announced a €45m catastrophe bond to provide fully collateralised protection against atmospheric phenomena, snow pressure and flood risks in Italy (including Vatican City and San Marino Republic) for three years. Atmos Re includes an indemnity trigger on an annual aggregate basis with an event cap of €24m and an event deductible of €1m. This trigger is designed to deliver protection against a series of small and medium sized events falling below the traditional per occurrence property cat reinsurance program. The transaction was structured and placed by Willis Towers Watson Securities. Munich Re acted as Co-Manager.
Willis Towers Watson

Third Point Re has said it remained committed to its asset manager Third Point LLC, despite poor investment results which led the firm to post a loss for Q4 and 2018. The company ended 2018 with a quarterly net loss of $298m after suffering a net investment loss of $276.8m and an underwriting deficit of $24.4m during the period. It recorded $18.5m of losses related to the California wildfire in Q4 and a combined ratio of 111.6%. Rob Bredahl, president and CEO said the firm had "benefitted from some modest improvements in pricing" at 1 January and continued "to expect our combined ratio to trend to below 100% as we earn in the catastrophe premium and continue to expand our underwriting platform into other higher margin types of reinsurance and lines of business",
Third Point Re

Utility firm PG&E has announced it is "probable" that its equipment was responsible for igniting the 2018 Camp Fire in California. The company is including a $10.5 billion pre-tax charge related to third-party claims in connection with the 2018 Camp Fire in its full-year and fourth-quarter 2018 financial results. "We recognize that more must be done to adapt to and address the increasing threat of wildfires and extreme weather in order to keep our customers and communities safe,” said John Simon, interim CEO of PG&E Corporation. Allstate, State Farm, USAA and other insurers have sued the company over losses resulting from the Camp Fire.
Pacific Gas & Electric

Posted: Monday, March 18th, 2019