November 2012/1

Alterra Capital president and CEO Marty Becker admitted that inexperience with fundraising requirements was one of the problems for reinsurers targeting third party capital.

Specialist ILS fund managers have set a high bar for reinsurers trying to enter the fund management sector, with some new entrants still falling short of demonstrating a "fund mentality", according to speakers at the annual Trading Risk Rendez-Vous hosted in New York last month.

The convergence market needs to strike a balance between catering to institutional investors seeking simple risk transfer structures and cedants wanting broader indemnity reinsurance coverage, according to Deutsche Bank director Michael Halsband.

There is a tremendous amount of capital trying to find its way into the ILS space, but the market needs to grow to capture this investment, Aon Benfield Securities CEO Paul Schultz said at the 2012 annual Trading Risk Rendez-Vous.

Business interruption (BI) claims could account for a significant portion of the losses from Hurricane Sandy, but there are a number of limitations on BI cover, according to Daniel Gerber, co-chair of global insurance services at law firm Goldberg Segalla.

Attempts to model losses from Superstorm Sandy has presented some unique challenges, but nevertheless the storm fits within the expected range of outcomes for a north-east hurricane, modelling firms say.

Uncertainty over losses from Superstorm Sandy will underpin property catastrophe rates at the 1 January 2013 renewals.

As projections for industry insured losses from Sandy creep upwards towards $25bn, the impact on both the traditional and non-traditional reinsurance markets inevitably looks to be rising.

Florida's state-backed insurer Citizens is planning to re-enter the cat bond market in 2013 with an additional $250mn placement, after making its debut this year with the $750mn Everglades Re transaction.

Collateralised reinsurers are set to lift their participation on the first part of the California Earthquake Authority (CEA)'s 2013 reinsurance programme, according to proposals published by the organisation.

Sidecar DaVinci makes investment gains; AlphaCat division lifts results

Catco took a 1.5 percent gross hit to its 2012 annual returns after settling a marine contract that was exposed to Costa Concordia claims.

Changes to incoming Dodd-Frank regulations could force ILS issuers to face another layer of oversight from US regulators, a law firm has warned.

AQR wins Illinois mandate; Minnows close doors after exec moves; Third Point Re offers investment deals

Start-up ILS fund manager Eastpoint Asset Management hopes to reach the $100mn mark in its first year of operations and is targeting $500mn within three or four years, the firm's management told Trading Risk.

Specialist ILS fund manager Securis has added a new lower-risk fund to its line-up.

No superstorm - it's a hurricane for PCS; Sandy's CHI doubles Irene

The market for north-east industry loss warranties (ILWs) has dislocated as trading halts in the aftermath of Hurricane Sandy as participants attempt to gain clarity on the loss, according to Aon Benfield Global ReSpecialty deputy CEO Dan Burrows.

Investors have been willing to trade bonds exposed to uncertainty about Sandy losses, but some were subject to hefty markdowns, leading the Swiss Re Cat Bond Price Return Index down 2.6 percent the week after the storm struck.

Swiss Re and Scor nearly doubled their latest cat bond issuances as pricing on the deals fell below initial expectations due to continued strong investor demand over the past month.

This is just my third hurricane season in the industry, so perhaps you'll understand why I'd started writing 2012 off as another non-event for catastrophe losses in mid-October.

Montpelier Re is progressing with plans to expand its third party funds management business through two new ventures, Trading Risk has learned.

Sandy losses will be unevenly distributed among risk carriers in the convergence sector, with growing loss estimates signalling the prospect of more industry loss warranties (ILWs) being triggered.