April 2016/1

ILS investors responded to new cat bonds at both ends of the risk-return spectrum with strong demand in a diverse and record-setting first quarter.

Upcoming changes to ratings agency AM Best's Capital Adequacy Ratio (BCAR) could penalise ILS markets over rated carriers, Willis Capital Markets & Advisory (WCMA) said in its first quarter ILS report

Collateral lock-ups could drag down ILS investor returns by 15-20 percent of long-term expected profits for deals with a moderate chance of loss, according to research by Milliman.

More than a decade on from the devastating 2004-05 hurricane season, scientists are beginning to debate whether to call an end to a cycle of more active Atlantic cyclone activity

The world's biggest catastrophe cedant Zenkyoren achieved a 7.5 percent rate reduction at 1 April as it purchased a new 200bn yen ($1.77bn) top layer, sister publication The Insurance Insider reported

Demand for Florida reinsurance cover could drop this year if both the state's insurer and reinsurer choose not to buy new protection, Aon Benfield said in its April renewals report

At the 1 April reinsurance renewal season the market softened for the fourth consecutive year, but reductions have slowed from those achieved a year ago

A group of reinsurer sidecars tracked by Trading Risk posted average returns of just above 5 percent in the three months to 31 January, implying they are on track to deliver annualised returns in the low 20 percent range

Allied World Q1 premium drop; Ontario Teachers'sells ANV; Alternative capital hits $72bn: Aon Benfield; RMS on Ecuador quake; Record rainfall floods Texas...

A state-owned enterprise in China is seeking $100mn for a possible corporate cat bond

Modelling firm AIR Worldwide said insured losses from the earthquakes that struck the southern Japanese island of Kyushu earlier this month could be between 180bn yen ($1.7bn) and 320bn yen ($2.9bn)

Aeolus became one of the top 10 absolute return managers for the Pennsylvania Public School Employees' Retirement System (PSERS) in its 2015 fiscal year

A group of seven cat bond-only funds tracked by Trading Risk has generated an average return of 0.79 percent for the first quarter, two-thirds ahead of the Q1 2015 figure of 0.27 percent

Strong bidding interest on the secondary cat bond market helped to counteract the influence of seasonality in early April

Lane Financial estimated the ILS market's turnover rate at about 20 percent or $4bn a year, after looking at 21 months of secondary trading data filed by the industry with US regulators

Willis Capital Markets & Advisory has been marketing two Resilience Re transactions to ILS investors in the past month, sources said

The first quarter saw an unusually high volume of Japanese typhoon bonds, as both Mitsui Sumitomo and Sompo Japan Nipponkoa returned to the ILS market

A Texas Windstorm Insurance Association committee has proposed that the organisation maintain its reinsurance cover at $2.2bn for 2016, implying a slight reduction in its traditional placement

Luxembourg regulators are introducing stringent diversification requirements for Ucits cat bond funds under their oversight, in a move that could skew demand for non-US bonds

The magnitude 7.8 earthquake that struck Ecuador on 16 April will produce total insured losses of between $325mn and $850mn, AIR Worldwide said on 21 April

An organised city planner might well look at a road map of the reinsurance sector and weep

ILS investors responded to new cat bonds at both ends of the risk-return spectrum with strong demand in a diverse and record-setting first quarter

Dutch pension fund service provider PGGM has more than EUR3bn ($3.39bn) invested in the ILS sector after recruiting several reinsurer-led managers