News review | May 14 2019

Florida and southern US primary insurer Safepoint is going to expand its use of collateralised reinsurance capital, with Pompano Re Ltd, a new special purpose insurer (SPI), having been registered by the firm. Safepoint is already a sponsor of catastrophe bonds, with its newest cat bond being issued in Singapore. But its use of Bermuda as a domicile for ILS looks set to continue as well, with SPI Pompano Re having been established and registered on the island in April 2019.

Artemis

Growth of the Insurance-linked securities market continued to slow in the first quarter of 2019 following the reduction seen in Q4 2018. Slightly more than $1.1 billion was raised through non-life catastrophe bond issues, compared with an average of $1.8 million over the most recent six first quarters, the lowest during the period, and around one-third of the record-breaking activity observed in Q1, 2018, according to Willis Re.

Willis Re

The World Bank has partnered with the Government to develop a catastrophe bond for Jamaica. Jamaica’s finance and public service minister Nigel Clarke spoke at the Jamaica Stock Exchange disaster risk financing seminar, where he said the vehicle would help generate funding to help the country respond to the damage caused by natural disasters.

Bermuda Re

Vermeer Reinsurance Ltd, the latest joint-venture vehicle from RenaissanceRe that is backed by Dutch pension fund manager and significant ILS investor PGGM, has got off to a strong start at the beginning of 2019. The Vermeer Re launch, as well as additional fundraising for its other third-party capital vehicles, helped RenRe take its joint venture and ILS capital under management to around $5 billion so far this year.

RenaissanceRe

Florian Steiger, portfolio manager at Twelve Capital, thinks there is significant opportunity in the cat bond market following a period of repricing. He noted that case bond spreads are now indicating levels last seen over five years ago and that diversification opportunities had grown substantially. "Many new perils and regions have come to the market and the overall market size in existing peak perils has also grown," he said. "From a portfolio management perspective, this is positive as it gives more optionality to portfolio managers."

Twelve Capital

Nearly 250 tornadoes touched down in the US during April contributing to multi-billion-dollar thunderstorm economic losses. The first of two major tornado outbreaks swept across southern and eastern sections of the US from April 13-15. Total economic losses were estimated at up to $925m, with insurers covering approximately $700m of the cost.

Aon Benfield

PERILS AG has today disclosed its second loss estimate of A$1 billion for the flood event which affected northern Queensland, and in particular the city of Townsville, between 26 January and 10 February 2019. It compares to the initial loss estimate of A$957m which was issued by PERILS on 15 March 2019 and covers property lines of business only.

PERILS AG

Posted: Monday, July 15th, 2019