Trading Risk September 2017

Hurricane Harvey's impact on Texas could potentially produce an underweight loss for the ILS market relative to the broader reinsurance sector.

The largest component of Harvey's damage will stem from flooding in the Houston area, so who is going to take those losses?

The major continental carriers and dominant catastrophe writers are likely to be among the key reinsurers of the regional and specialist insurers exposed to Hurricane Harvey claims.

Shrinking hedge fund Pine River Capital Management has shut its ILS desk, joining the ranks of generalist asset managers that have retrenched from the sector, Trading Risk revealed this month.

Hurricane Harvey had much less of an impact on the cat bond market than last year's Matthew, but its quick intensification also left less time for livecat traders to manoeuvre ahead of the event.

Hurricane Harvey will impact reinsurer earnings but is unlikely to spur a reversal in softening pricing, analysts said.

This is certainly not going to be a year where the reinsurance industry is twiddling its thumbs at the annual Monte Carlo Rendez-Vous.

Cat bond broker-dealers said the market had plenty of impetus left after a record-breaking first half of 2017.

The Prudential Regulation Authority (PRA) is due to issue rules based on its interpretation of the UK's recently published ILS regulations at the end of this month or in early October.

The $430mn Spectrum Re cat bond issued in June this year by fronting carrier Tokio Millennium Re was ultimately for the benefit of Credit Suisse's ILS entities, sources told Trading Risk.

JLT Re has appointed Nicolas Bardon as a partner in its Bermuda operation, reporting to head of office Guy Hengesbaugh.

Chaucer is working to establish a new sidecar for 2018 as other Lloyd's (re)insurers consider new third-party capital vehicles, sources said.