News Review | 21 October 2013

Catlin Group made a return to the catastrophe bond market with Galileo Re, a $175m multi-peril deal. The Bermuda-domiciled special purpose insurer will cover US named windstorm, US earthquake, Canada earthquake and European windstorm risks. Willis Capital Markets & Advisory is the sole structuring agent and bookrunner for the transaction. The deal will provide Catlin with protection for three years from January 2014 and will cover losses from most of Catlin’s insurance and reinsurance subsidiaries, as well as its Lloyd’s syndicates.

Montpelier Re’s Blue Capital Reinsurance Holdings has made a filing with the SEC to raise up to $100m in an initial public offering. Blue Capital was founded earlier this year to invest in fully collateralised reinsurance-linked contracts and other investments carrying exposures to insured catastrophe event risks. Blue Capital Global Reinsurance Fund has proposed a price of $1.09 per share for the company's second placing which it previously announced would be subject to a maximum of $100m. The price represents a premium of 3.4% to the net asset value per ordinary share, as at 30 September.

Specialist ILS fund manager Leadenhall Capital Partners announced that it has passed $1.5bn of assets under management as of September 2013. Leadenhall, a London-based non-life and life insurance-linked securities and collateralised reinsurance asset manager, has been growing its assets under management rapidly in 2013, from $1bn in March to $1.4bn in June this year. The firm is a joint venture between Lloyd’s insurer Amlin and its own management team.

Giant reinsurer Munich Re says it expects 2013 to be a record-breaking year for cat bond and non-life ILS issuance, according to its latest quarterly ILS market report. 2007 saw $6.8bn of issuance, but with $5.48bn already issued this year the company is on course for around $7bn. Munich Re witnessed a record level of catastrophe bond issuance in the third-quarter. The carrier recorded $1.45bn of issuance in Q3 2013.

Insurance-related listings, including catastrophe bonds, insurance-linked securities and reinsurance-linked investment funds on the Bermuda Stock Exchange (BSX) have increased to a record total of $8.4bn.
The volume of listed ILS, cat bonds and reinsurance-linked funds on the BSX has increased by approximately $2.6bn over this year. BSX President and Chief Executive Officer Greg Wojciechowski said: “We’re delighted to hit this new milestone in terms of insurance-linked listings on the Bermuda Stock Exchange. The rapid growth in listings seen in 2013 is testament to the markets continuing growth and its acceptance of the BSX as a home for transactions and instruments.”

As reinsurers and buyers prepare for this year’s annual meeting in Baden Baden, Willis Re argued that European carriers are unfazed by the levels of excess capital. James Vickers at Willis Re pointed out that European reinsurers are showing flexibility in their attitudes to ILS rather than seeing it as a threat to traditional property and catastrophe reinsurance business. The meeting runs from 20-24 October and is round two of their annual renewal negotiations following Monte Carlo.

The rapid growth in the number of people living in cities and urban landscapes is increasing the world’s susceptibility to natural disasters, according to a new report by the Institute of Mechanical Engineers. ‘Natural disasters: saving lives today, building resilience for tomorrow’ warns that the unprecedented influx of people to urban areas across the developing world is leading to a large increase in people living in locations susceptible to natural disasters. The situation is exacerbated by the explosive expansion of informal settlements or ‘slums’. About 180,000 people move to urban areas every day, with 18% of all urban housing being non-permanent or ‘slums’ – which are particularly vulnerable to the impact of extreme natural events.

Catastrophe modeler, EQECAT, has updated its insured loss databases for European windstorm and US hurricanes. In the US Hurricane ILD, the losses are presented in a Year Loss Table (YLT) format with a full-time domain representation of EQECAT’s view of the frequency and severity distribution of industry losses from hurricane risk. The European Windstorm ILD is based on the results of Eurowind™, EQECAT’s European windstorm model on the RQE 14 platform. Probabilistic results have been returned for 22 countries across Europe.

VisionRe Limited, a reinsurance-linked investment vehicle designed to offer high-net worth and institutional investors access to the Lloyd’s of London re/insurance market, is deferring its capital raising and capacity deployment until 2014 citing a lack of attractive opportunities. 

VisionRe was launched in June by Argenta Private Capital Limited as an unquoted Guernsey based company acting as an investment vehicle which would offer investors a way to access the returns of the insurance and reinsurance market by providing capital to insurance and reinsurance business which trade in the Lloyd’s market.

Bermudian (re)insurer Endurance Specialty Holdings Ltd has announced the appointment of Christopher Donelan to head up its North American reinsurance division. Donelan will join the company as President & Chief Underwriting Officer for Endurance Re US. Formerly of Axis Re US, Donelan has almost 25 years' experience in the US reinsurance market.

Posted: Monday, October 21st, 2013