Rates

Reinsurance and retro buyers obtained further rate reductions at the 1 July renewals, although Australian catastrophe losses led to isolated price increases.

Second quarter cat bond issuances totalled $6.7bn, according to Trading Risk figures, making it the highest figure for any quarter on record

Australasian catastrophe losses in the past year have produced isolated examples of increasing rates at the 1 July reinsurance renewals, according to sources.

Generali has lowered the price guidance on its Lion II Re 2017-1 cat bond, which would be the first ILS transaction to include European flood risks, Trading Risk understands

Despite a softer-than-expected 1 June Florida renewal, hedging activity in the industry loss warranty (ILW) market has been slow, with buyers holding back amid a glut of capacity, sources said.

The main factors in this year's "double-dip" Florida reinsurance renewal were abundant supply, reduced demand from several key buyers and uncertainty over model changes.

A group of major Florida-based insurance carriers reported obtaining more favourable rates on their reinsurance programmes at 1 June, as a number of firms cut back their limit in a renewal marked by subdued demand.

Allstate reduced its traditional limit when it renewed its $4.42bn nationwide catastrophe reinsurance treaty at the mid-year renewals, after having cover up to $4.55bn last year, sister publication The Insurance Insider reported.

Larger residual insurers were among cedants that prospered in the June renewals from competition for US property catastrophe reinsurance business.

Newly issued cat bonds, including the latest Alamo Re and Citrus Re 2017-1, have already traded above par on the secondary market, in a sign of strong ILS demand.

JLT Re said that "renewed vigour" from ILS markets looking to deploy capital contributed to a step-up in reinsurance rate reductions at this year's 1 June renewal.

Pricing for the riskier layer of Tokio Millennium Re's $250mn Spectrum Re cat bond has fallen below the initial target range, as the reinsurer looks to close its first major ILS transaction.