July 2011/1

Aon Benfield Securities has completed a $160mn private cat bond placement for a Japanese insurer with a handful of large ILS fund managers, Trading Risk can reveal.

As Hurricane Irene bears down on the East coast of the US, brokers have transacted livecat industry loss warranty

Goldman Sachs trader, Sung Yim, has left the firm after four years specialising in insurance linked securities and industry loss warranties (ILW), Trading Risk can reveal.

The BBC pension scheme recently awarded a £76mn ($124mn) mandate to Nephila Capital to invest in insurance-linked risk, joining the growing body of pension funds investing in the sector.

Investment manager AQR Capital Management has confirmed that it is setting up a reinsurance investment team led by ex-Magnetar executive Andrew Sterge, as revealed by Trading Risk last month.

The links between the performance of ILS assets and the general stockmarket are weakening as the nervousness of the financial crisis recedes, according to the latest quarterly report from Lane Financial.

Former Manulife P&C chief Andreas Kusay says he is confident his $300mn retro start-up Aliseo Re will be writing business for January 2012, despite the launch delay.

(Re)insurer Alterra and private equity partner Stone Point Capital opened up entry to their recently launched New Point IV sidecar to six external investors.

The ILS asset class has delivered solid double-digit returns to investors over the past two years, but 2011 performance will be marred by catastrophe losses.

The influx of capital into ILS funds continued last month, with two European funds winning major mandates.

With much of the international (re)insurance market's focus trained on pricing of US and Asia Pacific property cat programmes, the retro market's activities at the mid-year renewals went broadly under the radar.

Trading Risk explores how ILS fund managers are handling the legal and reputational risks of dicing up their funds to splice out catastrophe losses

High demand for industry loss warranties (ILWs) from reinsurers seeking to stay in the middle of the loss-reporting pack has pushed prices steadily up through the second quarter, according to Guy Carpenter.

Swiss-based ILS fund manager Clariden Leu called for smaller structuring agents to look to the private market for cat bond "lite" deals after arranging its second such transaction.

Climate Exchange founder Neil Eckert has held talks with the Chicago Mercantile Exchange about hosting the Ifex exchange-traded catastrophe derivatives but the proposed deal has stalled, Trading Risk understands.

Ratings agency Standard & Poor's (S&P) downgraded American Family Mutual's Mariah Re 2010-1 cat bond last month as the loss tally from May's Joplin tornado edged towards the $300mn maximum claim possible under the aggregate deal.

The brutal toll of H1 catastrophe events has made 2011 the costliest year on record for cat-related economic losses with six months still to run, data from Munich Re's NatCat service shows.

Marsh offers Nephila's CWIL to primary market; Amlin buys CWIL at pre-Japan rates; Assurant bonds stack up

RenaissanceRe affiliate DaVinci Re suffered $152.9mn of net cat losses in the first quarter, turning in a combined ratio of 246.3 percent, said ratings agency Moody's.

French-headquartered reinsurer Scor has issued EUR75mn of new shares as its contingent capital deal with investment bank UBS was triggered on rising first-quarter catastrophe loss estimates.

Risk modeller RMS released its latest Europe windstorm model on 12 July, introducing three new countries and increasing risk profiles in most regions.

Ratings agency Standard & Poor's (S&P) downgraded six cat bond tranches, totalling $470mn of capacity, in light of higher attachment probabilities under RMS's new Version 11.0 US hurricane model.

The downgrade of the tornado-struck Mariah Re 2010-1 bond caused the cat bond pricing index to falter this month, but sparked trading in the notes as investors speculated on the likelihood of more tornadoes this year.

Three new bonds are expected to come to market in July, bringing much-needed diversification to the ILS sector and ending a lean period for new issuance.