June 2012/1

Capital inflows of between $6bn and $8bn to the alternative reinsurance markets has only had a limited effect on reinsurance pricing as increases tailed off at the 1 July renewals, according to Guy Carpenter.

Luzi Hitz and Eduard Held argue that the market now has the building blocks in place to trade UK flood risk.

With the mid-year renewals in full swing, Trading Risk explores the convergence markets' inexorable march into underwriting reinsurance risk.

Florida Citizens placed $250mn of traditional reinsurance in a private placement, sitting alongside its $750mn Everglades cat bond, sister publication The Insurance Insider reported.

Average risk adjusted rate rises at the key mid-year reinsurance renewals came in at 2.5 percent to 5 percent in a disappointing outcome for carriers hoping to achieve 5-10 percent increases.

Reinsurance pricing volatility lessened for the Florida renewals this year but variation among reinsurer quotes remained above the levels experienced in the softer 2009 and 2010 years, according to Guy Carpenter.

P&C (re)insurers have moved towards a new "paradigm" where a smaller core balance sheet is complemented by off-balance sheet ventures that provide less volatile fee income and a more efficient way to flex capital, says Goldman Sachs head of structured finance Michael Millette.

RMS adds mortality to life model; Perils places $1bn; DaVinci affirmed; Glacier extended; Juniperus rebrands

Dexion Capital was due to close subscriptions to its proposed DCG Iris fund on 15 June, after Trading Risk went to press, as the fund manager made its second attempt to list a closed-ended ILS fund.

The longevity risk transfer market remains stable despite the exit of three major banks from the sector, experts said at a recent life risk seminar hosted by RMS in London.

The California Earthquake Authority (CEA) bought a $100mn collateralised reinsurance contract to top up its claims-paying capacity for 2012, according to governing board meeting documents.

ILS fund manager Michael Stahel says his team plan to continue to structure "cat bond lite" derivatives after moving out from under the Clariden Leu banking banner to their new home at LGT Asset Management.