Nationwide Mutual’s return to the catastrophe bond market in 2018 looks set to result in a bumper issuance, as the still-being-marketed Caelus Re V Ltd. (Series 2018-1) has grown by 50% to now offer investors $450m of US catastrophe risk exposed notes. Nationwide Mutual is one of the cat bond sponsors currently hoping to make a recovery under its outstanding transaction, as the $375m Caelus Re V Ltd. (Series 2017-1) is still facing an as yet to be determined but growing level of losses, due to the aggregate impacts of hurricanes and wildfires in 2017.
Universal Insurance Holdings chief risk officer Jon Springer believes that the company will be able to keep its reinsurance costs in 2018 at the same level as 2017. This is despite record catastrophe losses last year from hurricanes and rate increases in the primary business. Taking into account the multiyear capacity of the insurer and the coverage Universal purchased from the state-run Florida Hurricane Catastrophe Fund (FHCF), the firm has just 32 percent of total reinsurance premium budget up for renewal at June 1.
RenaissanceRe has grown its catastrophe business to benefit from an improved rate environment following major catastrophe losses in 2017. In its first quarter earnings statement it revealed it had "expanded participation on existing transactions and certain new transactions in the catastrophe excess of loss market". It further notes that a "significant portion" of the increase in gross premiums written in its catastrophe business noted were ceded to third-party investors in sidecar, Upsilon RFO Re.
Willis Towers Watson has announced it has integrated its ILS offering into its reinsurance business, Willis Re. Rafal Walkiewicz, CEO, Willis Towers Watson Securities said: “Our clients no longer decide between traditional reinsurance and third party capital, but expect an integrated solution that serves their long term needs. Capital markets professionals working hand in hand with reinsurance brokers are best positioned to offer strategic advice and continue to develop cutting edge products for our clients.”
AIG has revealed first quarter catastrophe losses of $376m, primarily relating to the California mudslides, US winter storms and the Papua New Guinea earthquake, as well as $135m of severe losses. A series of debris flows in Southern California occurred in early January 2018, particularly affecting areas northwest of Los Angeles in Santa Barbara County, one month after a series of major wildfires. This drove an overall increase in the North American loss ratio to 80% from 73% for Q1 2017.
American International Group
Asean’s finance ministers have met to discuss setting up South-east Asia’s first catastrophe risk pool which aims to narrow the protection gap. The South-east Asia Disaster Risk Insurance Facility (Seadrif) will tap the reinsurance industry for funding arrangements that can provide participating countries hit by natural disasters with rapid-response financing. Initially focused on Cambodia, Laos and Myanmar, Seadrif could expand to other countries in South-east Asia.
RMS has released its new Japan Earthquake and Tsunami High Definition (HD) model. The model incorporates key research advancements from the 2017 Japan Seismic Hazard Maps, as well as lessons learned from the 2011 Tohoku Earthquake and the 2016 Kumamoto Earthquakes.
Risk Management Solutions
Mount Kilauea volcano has erupted near a residential area on Hawaii's largest island, prompting a local state of emergency and the mandatory evacuation of 1,700 residents. The eruption follows a series of strong earthquakes over recent days.
Posted: Monday, May 7th, 2018