ILS
News in brief
‘Growth in spite of the challenges’ best sums up the ILS sector, as companies branch out into new lines, shed certain businesses and hire new specialists. Here are some of the top stories Bermuda:Re+ILS has covered in recent weeks.
The ILS market continued to expand despite last year being the fourth costliest on record for nat cat losses, according to Swiss Re’s ILS Market Insights. New issuance of $12.8 billion was 13 percent up on 2020 and also outpaced scheduled maturities, leading to an increase in notional outstanding to over $33.8 billion at the end of 2021.
The cat bond market has been diversifying perils for investors, with US wind perils accounting for about 35 percent of the offering, followed by multi-peril aggregate bonds and US earthquakes. Growth and pricing trends were not uniform, it noted, with tighter pricing for well-understood perils like California earthquake.
In contrast, structures exposed to high frequency and harder-to-model secondary perils such as thunderstorm and wildfire saw pricing increases and smaller deal sizes.
Gallagher Re’s latest Reinsurance Market Report showed that alternative reinsurance capital—which is mainly supplied by ILS fund managers—grew by 4 percent to reach $94 billion in 2021.
Meanwhile, Gallagher has recruited Aon Securities’ ILS specialist to help bring new and alternative capacity into the global cyber reinsurance market, stating that the demand for cover is growing “significantly”. Theo Norris will build and lead the development of the broker’s capabilities and expertise in this highly specialist area.
ILS Capital Management, an investment advisor specialising in insurance and reinsurance, has changed its name to Resolute Global Partners. The firm said the decision to rebrand follows the growth of its strategic partnerships and the addition of new business lines over the past several years, significantly expanding the scope of its investments beyond traditional ILS.
The firm’s strategic partners include Prospero Re, Producer’s National Corporation, MTPLY, Pouch Insurance, Stable Insurance, Evolution Risk, Arrow Agency, Helios Underwriting, and Lloyd’s corporate member RGP. Resolute Global has access to property reinsurance, specialty reinsurance, US insurance, global insurance and specialty insurance opportunities through its team’s expertise and strong relationships.
RenaissanceRe has announced the creation of Fontana Holdings, a joint venture that builds on the Bermudan reinsurer’s ILS capabilities, adding casualty and specialty to its property catastrophe focused offerings.
RenRe has long offered investment opportunities in catastrophe bonds, collateralised reinsurance and other ILS and has specific joint-ventures with large institutional investors, such as reinsurer Vermee Re. Fontana assumed a whole account quota share of RenRe’s global casualty and specialty book of business, including the credit portfolio, with the opportunity to raise additional capital and increase in scale over time.
Nephila Capital, the largest dedicated investment manager in the ILS, weather and catastrophe reinsurance space, has sold its stake in managing general agent platform Volante Global to fintech company Acrisure, which is acquiring the business. Nephila, now part of Markel, was the majority investor in Nephila Capital.
In January, Nephila Capital launched a new Lloyd’s syndicate (2358) that gives investors access to the specialty insurance market alongside its existing catastrophe and climate-based strategies. The reinsurance risk specialist launched its syndicate 2357 in 2013, the first at Lloyd’s to be wholly backed by capital from managed ILS portfolios. It is the largest institutional asset manager dedicated to investing in natural catastrophe and climate risk.
ILS Bermuda has appointed two industry leaders to key roles: Jo Stanton, head of finance at alternative investment manager and ILS specialist Tangency Capital, becomes the chair, while Hanni Ali, senior vice president for strategic partnerships at Hamilton Insurance Group is its new deputy chair.
“As we continue to assess the ongoing impacts of COVID-19, climate change and now geopolitical conflict across the globe, we see ILS as part of the solution, and Bermuda as the place where thought leaders can come together to provide solutions,” Stanton said.
