Trading Risk September 2018

Three ILS funds have joined the Florida Hurricane Catastrophe Fund (FHCF) programme this year, using Tokio Millennium Re as a fronting partner.

The 2017 cat losses are set to diminish the financial crisis’ historical ILS impact.

California has suffered another record-breaking wildfire season but the impact on the ILS market is likely to be marginal, sources have said.

Hurricane Lane, which hit Hawaii earlier this month, is set to be more of a flood event than a wind event for insurers, rating agency AM Best has said.

Markel Catco has said adverse development covers have never been a material component of its portfolio, although sources told this publication the firm has been offering the product to buyers for a number of years.

Citrus Re cat bond losses have more than doubled since May amid rising claims from Hurricane Irma, with the total $324mn payout expected to flow to Heritage set to be a new record for the ILS market.

A growing focus on climate change, as well as the increasing breadth of the ILS market, means that investors are considering the argument for ILS as an ESG investment, as well as a diversifier.

The omega ratio may provide a better view of risk-weighted returns within the ILS asset class, given the rare chance of a hefty loss, than other statistical benchmarks, commentators have suggested.

Chaucer may be the first of a number of Lloyd’s and London market insurers that are up for sale to change hands, sister publication The Insurance Insider has reported.

Securis Investment Partners has hired Paul Wilson from RMS and Adam Tidball from MS Amlin to lead its non-life catastrophe analytics team.

Almost 30 percent of the ILS funds tracked by the Eurekahedge ILS Advisers index recorded losses in the first half of 2018, with an average loss among this group of 2.82 percent, the index providers told Trading Risk.

If you rewind to Monte Carlo a decade ago, Nephila and other ILS managers were merely an exotic corner of the reinsurance markets – independent, small teams slugging away at building up franchises. Ten years on and the industry’s largest manager has just sold up to Markel in a landmark M&A deal, and the ILS top 10 have boomed from under $10bn to $68bn in size.