January 2015/1

Everest Re's Mt Logan Re sidecar wrote $138.4mn of gross premium in 2014, helping the group's reinsurance top line to rise by 12 percent to $4.39bn

The temporary lapse of the US Terrorism Risk Insurance Program Reauthorisation Act (Tripra) over the Christmas period highlighted the market shortage for terrorism (re)insurance cover.

The US Commodity Futures Trading Commission (CFTC) issued a letter last month that provides relief from registration for entities characterised as the commodity pool operators (CPOs) of ILS issuers.

Stone Ridge Asset Management's fleet of sidecars made an average gain of 8.2 percent in the three months to 31 October, according to the manager's latest annual report.

Munich Re has lined up $365mn of retro support from two Eden Re sidecars for 2015.

Brisbane hailstorm losses pass $1bn; TWIA proposes depop programme; Third Point Re puts $25mn in Kiskadee; Nat cat losses down in 2014; Health tech firm backs Sequant Re; Securis sets up Lloyd's fund; Pine River Re terminated; CSAM partners with Tamesis

XL Group CEO Mike McGavick said that the company's £2.79bn ($4.20bn) deal to acquire Catlin will create a top 10 reinsurer with expanded alternative capital capabilities.

Retro writer CatCo recorded 14 percent growth in net asset value (NAV) last year for its London-listed fund.

DE Shaw continued to cut back the amount of catastrophe limit it deploys as retro rate reductions again outpaced the slide in the underlying reinsurance markets, sources said.

Within the retro market, industry loss warranty (ILW) rates have been pared back to the point that many non-US contracts are now being quoted below expected loss cost using RMS-modelled figures, various market participants said.

Liberty Mutual placed a tranche of three-year property catastrophe reinsurance cover as it secured a rate reduction of 8-10 percent on its renewing business, sister publication The Insurance Insider discovered.

Pressure on terms and conditions continued at the renewals, but LGT ILS Partner's Michael Stahel said that many requests were for "grey zone" cover in which it was difficult to quantify the risk.

Aon Benfield told clients that it expects US nationwide and Florida property catastrophe rates to slide by 7.5 to 12.5 percent in the 1 June and July renewals this year, sister title The Insurance Insider reported.

US property cat rates fell by 7.5-15 percent in the January 2015 renewals, although Guy Carpenter's European CEO Nick Frankland described the reductions as "no drama".

Guy Carpenter has estimated that the convergence market grew by a third in 2014, rising from $45bn to $60bn in size.

Pioneer Investment Management has established its ILS Interval fund with $50mn of capital, and now has total assets under management of $1.6bn in the ILS sector.

An ILS fund run by Deutsche Bank Asset Management (DBAM) began writing business in the January renewals after an extended incubation period, sources told Trading Risk.

Full-year 2014 returns generated by seven cat bond funds tracked by Trading Risk have come in on average 43 percent lower than in 2013, reflecting the impact of market softening.

American Strategic's cat bond Gator Re has recovered value in the New Year after the bond's annual aggregate loss tally reset.

Data from Lane Financial showed that the average ILS spread is now 2.36 percent above a 2.24 percent expected loss - the thinnest margin since the company began tracking records in 2002.

Cat bond traders said that activity on the secondary market was subdued in January, as there was less cash overhang than had been expected amid a large number of maturities.

Brokers took the lead in structuring activities on the cat bond market in 2014, according to data compiled by Trading Risk.

US life and health insurer Aetna kicked off activity on the ILS market for 2015 as it sought $200mn for its Vitality Re VI health insurance bond.

A flurry of deals at the end of December took ILS issuance to just under $2bn for the month and pushed the 2014 total to $8.9bn, according to Trading Risk records.