French-headquartered global reinsurer SCOR has returned to the capital market for its first catastrophe bond in over two years and has switched its preferred ILS domicile to the UK, leveraging the new regulatory regime there to sponsor a $300m Atlas Capital UK 2018 PLC (Series 2018 ISPV 1) transaction. SCOR’s previous Atlas catastrophe bonds have been largely domiciled in Ireland in recent years. The switch to the UK by a major global reinsurer for its latest cat bond deal is a vote of confidence for the recently enacted UK ILS regulatory and tax regime.
Frontline Insurance has entered the cat bond market with the launch of the $350m Frontline Re 2018-1 cat bond. The two-tranche cat bond will initially cover named storms in the states of Alabama, Florida, North Carolina and South Carolina. The bond will initially cover First Protective Insurance and Frontline Insurance Unlimited.
Hedge fund firm Tangency Capital launched last week with $50m in AUM to bet on the reinsurance market ahead of the next hurricane season. Tangency Capital, which has offices in London and Bermuda, will invest directly in non-life reinsurance risks. Despite capital-raising, only one insurance-linked hedge fund has launched so far in 2018, out of a market of 82 funds, according to data from industry tracker Preqin.
Ahead of the 2018 hurricane season, the Florida Hurricane Catastrophe Fund has revealed it has adequate reserves to cover its Hurricane Irma liabilities — as much as $300m in excess of its $17 billion statutory liability limit. The industry-wide loss from Irma has been estimated at more than $8 billion. The fund’s share exceeds $2 billion, nearly $400m has so far been paid.
The high level of natural catastrophes and adverse prior year development led to a full year gross loss of £431.5m for AIG Europe Ltd in 2017, according to its annual report. The insurer says it has "taken steps to reduce the future impact of these types of losses through a focus on risk selection, reduction in net policy limits and the deployment of targeted reinsurance".
AIG Europe Limited
Japanese reinsurer Toa Re will launch a new underwriting platform to write European reinsurance business by activating Toa 21st Century Reinsurance Company (TTFC), its Switzerland-domiciled wholly owned licensed reinsurance subsidiary. It will re-brand the business with the trading name Toa Re Europe and look to write third-party business, in addition to existing business from its parent in Japan.
The 2018 Atlantic hurricane season, which kicks off June 1, is expected to bring at least 14 named storms, according to researchers at Colorado State University, putting it above the long-term average of 11 recorded between 1950 and the present day. CSU is forecasting between 14 to 18 named storms, seven of which are expected to grow to hurricane strength, and three to five of which may become major hurricanes, defined as Category 3 or higher.
Posted: Monday, May 21st, 2018