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The market is characterised by rising prices and shrinking deal sizes as investors pick and choose over which bonds to back. -
Tension is emerging at the reinsurance level over the retrenchment from all-perils coverage, which previously offered ‘sleep-easy protection’.
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The European cat market is hardening faster than expected but the process is being delayed by ongoing negotiations over retro protection and varying lists of reinsurer demands to improve terms.
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Hurricane Ian’s legacy will undoubtedly lead to some shake-ups in the ILS sector, with ongoing progression outside cat and ESG strategies likely to be a focus.
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Investors are in the driving seat and able to ask for improvements such as higher extension spreads.
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Expansion is set to be a trend across Lloyd’s as syndicates look to capitalise on a hardening market.
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Initial loss estimates for the last quarter show lower hits to equity than observed after hurricanes Harvey, Irma and Maria five years ago.
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Some firms have fared better than others in the competition to raise funds during the year.
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Most ILS firms are marking the Ian loss as a $50bn+ event, although there are exceptions.
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Transparency and alignment of interests are the keys to expanding casualty ILS.
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The Gulf Coast state is keen to distance itself from Florida’s insurance woes but is resistant to some underlying changes.
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Early reporters emphasised an ongoing demand for structural change.
