May 2013/1

The capital markets undoubtedly dampened rate conditions at the 1 April renewals and are also having a "dramatic" influence on expected pricing at the June and July renewals, according to GC Securities' review of first quarter activity in the ILS market.

Capital market reinsurance capacity could rise by one third over the next three years to provide $57bn of limit by 2016, GC Securities estimated in a recent new Clear Path Analysis ILS market report.

The Louisiana Citizens Property Insurance top-up cover points to a growing demand for reinsurance as ILS pricing slips.

The Florida Citizens renewal created tensions in the market as other Floridian insurers initially pushed for similar rate reductions, according to Guy Carpenter managing director Lara Mowery.

Florida is expected to remain an attractive market for reinsurers despite fears of a particularly competitive 1 June renewal, although firms are divided on the impact it will have on rates.

Bermudian reinsurers Validus and Montpelier Re continued to lift their managed property catastrophe premiums in the first quarter but RenaissanceRe and Lancashire trimmed back their top lines as momentum in the property cat market slows in advance of stiff mid-year competition.

The Florida legislature has dropped proposals for a risk-pooling facility in the final version of a reform bill that includes measures to continue shrinking exposures at state-backed insurer Citizens.

The Florida Department of Financial Services is suing Allianz and its Bermudian subsidiary Allianz Risk Transfer (ART) for more than $20mn after alleging that the insurance group conspired to "loot" failed Floridian insurer Magnolia Insurance.

Deutsche Bank subsidiary Abbey Life's agreement to cover pension obligations worth £400mn for UK luxury motor firm Bentley Motors could be a catalyst for smaller longevity risk transfer deals, Aon Hewitt partner Matt Wilmington told Trading Risk.

Catastrophe modeller RMS says its latest modelling and analytics platform will be a disruptive force in an industry hungry for big data insights.

Prudential takes 17% Blue Capital stake; $200mn mandate win pushes Securis to US

Dutch pension fund giant PGGM has granted two new ILS mandates, taking its total allocation to the sector above 1 percent of the fund's EUR133bn total assets under management (AuM), Trading Risk understands.

Switzerland-based ILS fund manager Secquaero Advisors has announced plans to launch a new non-life only fund with new management partner Schroders.

Former Rochdale Securities ILS trader Craig Bonder has moved with his team from Maxim to AK Capital to set up the firm's first ILS trading desk.

Mercury Capital has launched one of the first tracker funds in the ILS sector, allowing external investors to follow its new MiCRIX index of industry loss warranty (ILW) prices.

A busy period for primary issuance and buoyant demand for cat bonds has fuelled a very active secondary market over the past month, but pricing has finally started to ease back from sustained highs earlier in the year.

ILS spreads continued to tighten relentlessly as more than $1.5bn of new issuance closed during a busy month.

Run-off provider Randall & Quilter (R&Q) has teamed up with a new Bermudian-based ILS fund to develop "exit solutions" for capital market investors in collateralised reinsurance.

Mt Logan Re plans to deploy capital in the mid-year renewals, the vehicle's CEO Rick Pagnani told Trading Risk.

I learned a new word of jargon this week reading about the RMS(one) platform - apparently ecosystems can be technological these days and not just environmental.

Dedicated cat funds are continuing to reduce their participation in new ILS issuance this year, according to statistics obtained by Trading Risk.

Non-traditional reinsurers are looking to grow their role in Florida this year as local insurers are opening up to the idea of issuing cat bonds, while collateralised reinsurance writers look to grow their business in the state.