March 2013/1

Dion Williams from law firm Taylor Wessing explores some of the issues investors in the latest generation of sidecars should be aware of

KKR: Nephila can scale up; Blue Water dealing; Amlin makesreinsurance savings

Hannover Re recovered EUR163mn from its retrocession providers in 2012 to assist in paying claims from Hurricane Sandy and the Costa Concordia sinking, which helped its non-life division to lift annual operating profit by 43 percent to EUR858mn

The ILS market needs to make a "paradigm shift" rather than pursue the goal of "convergence" in order to see significant growth, Liberty Mutual's global reinsurance senior vice president James Slaughter said in a panel at the Sifma ILS conference held in New York earlier this month.

Reinsurers are likely to pursue third party capital structures with longer-term horizons such as cat funds or permanent sidecars in 2013, while the number of temporary, opportunistic sidecars looks set to diminish, a panel of experts agreed at the annual Sifma ILS conference.

The small size of the alternative reinsurance sector may constrain the pace of its growth but there is still room for it to expand by 30-40 percent, according to Goldman Sachs managing director Shiv Kumar

At the time of writing, Mississippi's insurer of last resort was on the verge of finalising its reinsurance programme for the 2013 North Atlantic hurricane season.

The future of the Texas Windstorm Insurance Association (TWIA) is looking increasingly uncertain as the US residual insurance market heads toward the reinsurance renewal season.

RenaissanceRe CEO Neill Currie said the company is likely to do more "transformer" business where it acts as an intermediary for third-party capital and protection buyers

Willis has begun marketing a new retro product that is designed to edge index products closer to their indemnity counterparts, Trading Risk revealed earlier this month

The strength of investor interest in the (re)insurance sector is expected to keep spreads tight as ILS prices remained strong on the secondary market throughout March

State insurance pool buyers say that one of the key benefits of working with capital market reinsurers is the competition that it creates with traditional suppliers.

Investors in the $67.5mn Class G tranche of Nelson Re notes will be repaid in full after Glacier Re withdrew its arbitration case to give a smooth conclusion to a rocky four years for investors

Florida's legislature is considering measures to help smaller private insurers transfer cat risk to the capital markets after last year's successful $750mn Everglades Re cat bond debut by the state-backed Citizens.

Scor has entered into a value of in-force (VIF) monetisation transaction on a traditional mortality portfolio that belongs to Spanish insurer BBVA Seguros

Robust investor demand put pressure on rates as Nationwide Mutual closed its third cat bond Caelus Re III this month

RMS is set to moderate the view of hurricane risk from that contained in the Version 11 edition of its model when the new Version 13 is released this July.

The $750mn Everglades Re cat bond provided a 0.91 percent uplift to returns for the Swiss Re Global Index in 2012, according to a recent report from Swiss Re Capital Markets.

Berkshire Hathaway has agreed to underwrite a 7.5 percent share of Aon's $2.5bn book of Lloyd's business as part of reinsurance head Ajit Jain's response to changes in the market's pricing cycles

Longer-tail casualty business could "superficially" fit the risk appetite of pension funds better than property catastrophe reinsurance, Keefe, Bruyette & Woods (KBW) analyst Meyer Shields argued in a recent note on the industry.

The ILS market's track record does not yet reflect the true "tail risk" nature of the asset class, research firm Conning warned in a new report on the market.

Simon Fascione is likely to re-emerge at Bermudian fund manager Aeolus after his surprise exit from Lancashire, Trading Risk has learned

When you think about some of the deals that Berkshire Hathaway has struck in Australasia over the past couple of years it makes you wonder why so much attention is paid to the impact of alternative market capacity on the pricing cycle

Pricing on Japanese industry loss warranties (ILWs) has softened by about 25 percent since last year as the reinsurance market prepares for a static 1 April renewal season, sources said