February 2010/1

More than EUR1.3bn of cat bond capacity is potentially exposed to loss following this weekend’s devasting European windstorm Xynthia, according to Trading Risk data.

The Financial Services Authority (FSA) has voiced "significant concerns" about how life settlements products are sold to retail investors saying that the investment risk to consumers is "often downplayed", according to Peter Smith, head of investment in the UK regulator's policy department.

German car maker BMW has hedged almost £3bn of longevity risks in its UK operations pension scheme in the largest longevity hedge to date for the sector.

Strong 2009 performances and financial markets stabilisation have funnelled additional capacity into the convergence sector, with Axa and Q Re deploying new funds at the start of 2010.

The Thai subsidiary of Sompo Japan Insurance has launched an index-based weather insurance product to provide cover for rice farmers against drought in Northeast Thailand.

US investment bank JP Morgan is willing to contribute its LifeMetrics parametric longevity index to the Life and Longevity Markets Association (LLMA) in order to focus the market's efforts on a single listing.

Dedicated insurance-linked derivatives broker Myrias LLC has ceased to trade, closing its screen-based trading platform from 22 January.

Andreas Kusay - ex-Manulife executive and mooted head of proposed $100mn+ collateralised retro vehicle Equinox - has joined cat futures trading platform IFEX as a consultant to promote its event-linked futures (ELFs).

The price of US wind industry loss warranty (ILW) instruments has fallen by up to 40 percent year-on-year for the 1/1 renewal season, with average rates on line (RoL) reducing around 25 percent over the prior year across all perils.

A powerful winter storm produced heavy snow and strong winds across the US Eastern Seaboard on 5 and 6 February, prompting states of emergency in Washington DC, Maryland and Virginia.

Swiss Re has called for more public-private transactions after a devastating earthquake in Haiti last month caused billions of dollars in economic losses.

European (re)insurers face an average 70 percent increase in solvency capital requirements (SCR) from changes to implementation measures for the European regulatory standard proposed over the past six months.

Risk Management Solutions (RMS) has officially launched its third natural catastrophe index under the Paradex banner - Paradex US Earthquake (PUSEQ).

Hannover Re has expanded its K6 sidecar vehicle by $152mn, to offer $329mn of total capacity for the German reinsurer's catastrophe retro business in 2010.

The Weather Risk Management Association (WRMA) has broadened its membership criteria to include companies active in cat bonds, ILS and industry loss warranties.

Ratings agency Moody's Investors Service has put EUR189mn of Swiss Re's Crystal Credit securitisation on review for further downgrade as losses mount.

Fitch has confirmed the expected BBB- rating on EUR38.9mn of Value In Force life notes issued by Atlanticlux-sponsored special purpose vehicle (SPV) Ganeesha ISA.

Munich Re's 2009 full year net profit soared 62 percent to EUR2.56bn, exceeding analysts' estimates and its own guidance.

US investment bank JP Morgan is willing to contribute its LifeMetrics parametric longevity index to the Life and Longevity Markets Association (LLMA) in order to focus the market's efforts on a single listing, Trading Risk can reveal.

With more bad news emerging from the insurance-linked derivative sector this month, one could be forgiven for reaching for the quill and penning the obituary of exchange-traded (re)insurance risk.

Uncertainty shadows the near-term renewal of Bermudian investment firm Nephila Capital's $310mn catastrophe collateralised risk obligation (CRO) Gamut Re, casting doubt on the renewal of more than $1.75bn of non-standard ILS capacity in 2010.