October 2013/1

Lloyd's chairman John Nelson invoked parallels with the banking crisis as he alleged that the rise of the alternative reinsurance market risked distancing capital from the risk selection process, in a speech at the Monte Carlo Rendez-Vous

Liberty Mutual's director of reinsurance strategy James Slaughter has warned that the alternative reinsurance market must find new ways to differentiate itself after stoking a fierce competitive response from traditional providers

ILS market participants stressed that investors are keenly watching pricing after Munich Re questioned ILS underwriting practices at the reinsurance industry's annual gathering in Monte Carlo in September

The California Earthquake Authority (CEA) added a new three-year $100mn contract to its reinsurance programme in the mid-year renewals as it increased multi-year cover to more than a third of its overall limit

London-listed Catco has picked up almost a 20 percent share of the estimated $9bn indemnity retrocession market since it began underwriting at the start of 2011

Towers Watson ILS team to move to JLT; Bermuda prepares for convergence scrum; New Point VI secures $215mn for 1.1; Stone Ridge launches closed-ended fund; Collateralised marine plunge at Barbican; Hedge funds eye reinsurance; Multi-Strat fundraising; Ontario Teachers' backs ANV Lloyd's expansion

ILS managers could find it difficult to deploy capital that is entering the market chasing beta returns, PwC warned in a report released at the Monte Carlo Rendez-Vous

The US Commodity Futures Trading Commission (CFTC) could soon allow cat bond structures to fall within an exemption under the Dodd-Frank Act, potentially easing the regulatory burden for ILS issuers

PCS and the Cayman Islands Stock Exchange have collaborated on a new project to trade industry loss warranty products.

LGT Capital Partners has predicted that 2014 will be the first year that it writes more collateralised reinsurance than cat bonds as rate pressure on ILS is expected to continue at the 1 January renewals

The Swiss Re Global Cat Bond Price Return Index has climbed to its highest point in the past 18 months, spurred by a combination of increased appetite for bonds, a consistently low spread environment and seasonality.

Cat bond funds have delivered average returns of more than 5 percent to date in 2013, putting them roughly in line with their performance at the nine-month mark last year

Swiss Re's second issuance of contingent write-off notes has closed at a size of SwF175mn ($193.6mn) after pricing in the middle of initial guidance, Trading Risk understands.

Strong investor demand in September and October helped boost the size of a trio of diversifying cat bonds to $960mn from a cumulative target of less than $550mn, taking total issuance for the year to date to $6.2bn.

Reinsurance premiums are still within the range of investor expectations from the ILS asset class even if the market has softened to the lower end of this range, Towers Watson investment consultant Todor Todorov said.

Baillie Gifford, TIAA-CREF and Pioneer Investments are among the key institutional investors that have increased their involvement in the ILS market over the past year, according to sources.

The (re)insurance industry is normally vigilant about reminding regulators that they're not banks - dodging the AIG elephant in the room to point out that they got through the crisis fine, thank you very much, and hands off our balance sheets please.

A good amount of work is already underway for early January reinsurance renewals as buyers seek to lock in favourable pricing and place significant limit outside the subscription market.

Swiss Re has significantly expanded its Sector Re sidecar over the past year, Trading Risk understands, with sources suggesting that it has roughly doubled in size to $500mn-$700mn.