DOCSLIB.ORG

…AFTER TWO UNEXPECTED YEARS? in 2007? We Offer a Variety of Fascinating Opinions on Pages 1 and 11 18075B BIQ.Qxp:BIQ Pg 4/9/07 8:21 AM Page 2

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
…AFTER TWO UNEXPECTED YEARS? in 2007? We Offer a Variety of Fascinating Opinions on Pages 1 and 11 18075B BIQ.Qxp:BIQ Pg 4/9/07 8:21 AM Page 2 18075B_BIQ.qxp:18075B_BIQ_Pg_ 4/9/07 7:39 AM Page 1 YEAR-END RESULTS & ANALYSIS Q4 12 BERMUDA’S BIQApril 2007 OWN POWER BERMUDA BROKER 17 INSURANCE QUARTERLY THE MANY © 2007 Bermuda Media FLAGS OF in association with FLAGSTONE 15 WHAT’S NEXT… It couldn’t get much better than 2006 for the Bermuda market after the misery of the previous year — see PricewaterhouseCooper’s painstakingly prepared annual figures on pages 12 and 13 — but what is in store for us …AFTER TWO UNEXPECTED YEARS? in 2007? We offer a variety of fascinating opinions on pages 1 and 11 18075B_BIQ.qxp:BIQ_Pg_ 4/9/07 8:21 AM Page 2 There is an artful balance in property OPPORTUNITY catastrophe reinsurance between acting IN THE EXTREME. on opportunity and mitigating risk, especially in extreme conditions. At IPCRe, we do both with firm discipline and a solid business model. Our clients work with IPCRe because we've earned their confidence through an experienced and consistent team, a transparent balance sheet, and the added value of excellent service. www.ipcre.bm 18075B_BIQ.qxp:BIQ_Pg_ 4/9/07 8:23 AM Page 1 THE QUOTES OF THE QUARTER “We are seeing softening “We achieved [record] results in a transitional in several markets, and year [in which] we reduced catastrophe exposures discipline will be critical… by about 50% while maintaining significant retro- BIQ Uncertainty created by cessional spend. This underscores the strengths of BERMUDA INSURANCE recent legislative changes our diversified business model.” in Florida will reduce — Chris O’Kane, Aspen QUARTERLY demand for some prod- Volume 3, Number 2 ucts. We are responding “In addition to record April 2007 … by shrinking in areas earnings, we took signifi- that do not meet our standards and growing in cant steps to further Editor areas we find attractive.” expand and balance our Charles Barclay — Neill Currie, RenaissanceRe book of business through Art Director growth in our specialty Paul Shapiro “Our operating return on equity was 20.1%, lines and we significantly Contributing Editor which was the main driver behind the 19.9% reduced our catastrophe Chris Gibbons increase in book value for 2006.” risk profile.” — Brian O’Hara, XL — Kenneth LeStrange, Endurance Director of Marketing Lissa Fisher “Record earnings for 2006 “We are working to main- Publisher Ian Coles [have resulted] in an tain our underwriting dis- increase in diluted book cipline through the cur- Published by Bermuda Media, Suite 310, The International Centre, 26 value per common share rent market conditions, Bermudiana Road, Hamilton HM 11, Bermuda. Postal address: PO Box HM of 25% … [Barring] major bolstered by a very strong 2032, Hamilton HM HX, Bermuda. Tel: catastrophic events, we balance sheet, strong 292-7279 Fax: 295-3189 Email: [email protected]. Web: bermudamedia.bm. expect 2007 to be very financial ratings, and an Printed in Canada. positive.” invested asset base Published four times a year In associa- — John Charman, AXIS tion with PricewaterhouseCoopers. approaching $6 billion.” Cover image courtesy of Getty Images — Scott Carmilani, Allied World It’s a great place to be again GUEST OPINION: OUTLOOK SUNNY FOR BERMUDA WITH JUST A FEW POTENTIAL CLOUDS THREATENING ermuda’s reinsurance market writers generally agreed on what may not be enough capacity for surance market is looking like a gets top marks from respected the correct price should be and peak risk zones. IPCRe’s Jim Bryce great place to be again.” Bindustry publication Reactions buyers looking to get bargains says in the magazine: “Just because Still, the magazine believes the for its resilience and recovery from would have struggled. But pro- a programme gets placed doesn’t Class of 2005 start-ups face some the heavy 2005 losses and also for grammes got done once rates mean you have adequate supply.” challenges if, as expected, the mar- continuing to be at the forefront of reached levels that were accept- He adds: “All this capacity can only ket softens in 2008, comparing the merging capital markets and able,” the magazine says. be tested by a loss. Even with the them to the Class of 1993, rather insurance. “This was thanks in part to the crash derby of sidecars and hedge than 2001: “[Like 1993], the Class The magazine’s annual Ber - capital that has flowed into funds, we still don’t have enough of 2005 was set up to capitalise on muda market review reports that Bermuda since the 2005 hurricane capacity. A lot of this synthetic rocketing catastrophe rates follow- capacity is still pouring into the season. The island is now firmly capital will probably disappear if ing record insured losses from the island and that January’s renewals established as the go-to place for there is a severe event.” 2005 hurricane season. were far more relaxed than last new reinsurance capital.” For now, though, the magazine “By contrast, the firms set up July’s tense negotiations when However, some market veterans notes that “all participants in the after September 11 were able to reinsurers pushed through big are warning that despite the tide of Bermuda market, new and old, are take advantage of rates hardening price hikes ahead of the then capital — increasingly coming raking in the cash. After a catas- across almost all insurance lines, imminent — but ultimately benign from hedge funds — there still trophe-free 2006, the island’s rein- and quickly established themselves — hurricane season. as multi-line insurance and rein- Despite reinsurers being under surance groups. pressure from increased capital ‘The Class of 2005’s narrow focus will “The Class of 2005’s narrow demands by rating agencies and focus will present it with chal- increased loss projections from the present it with challenges. Companies lenges. Companies will be looking risk modellers, programmes were will be looking to grow against a back- to grow against a background of not only filled but oversubscrip- declining premiums in most mar- tions even led some reinsurers to ground of declining premiums in most kets, and will need to find areas sign-down their risks. that are profitable.” “The consensus among the markets and we will need to find areas For more information, go to island’s reinsurers is that under- that are profitable’ www.reactionsnet.com [ 1 ] 18075B_BIQ.qxp:BIQ_Pg_ 4/12/07 2:06 PM Page 2 NEWS REVIEW Sidecars still revving up BUT THE NEWER MODELS HAVE A DIFFERENCE he race to establish Bermuda- Insurance retrocessional team based sidecar vehicles shows no operating from Bermuda. Brit Tsigns of letting up with several CEO Dane Douetil said: “Terms new companies formed in the last and conditions and pricing in the few months. But the new arrivals, retrocession market have strength- focusing on providing back-up to ened further and we and our fellow retrocessional business, seem to be investors regard this as the optimal starting a new trend in sidecars — time to launch the new carrier. the name given to flexible financial “This will be our first invest- predominantly short-tail property Harbor Point says New Point structures that reinsure one cedant ment in an offshore underwriting reinsurance and insurance, special- Re, its new Class 3 reinsurer capi- under a quota-share reinsurance business. [It] is a potential blue- ising in catastrophe coverage. talised with approximately $250 agreement. print … for other classes of busi- Paris Re will cede 24% of its million, was formed specifically for Last December, UK insurer and ness with similar characteristics.” property catastrophe excess-of-loss writing collateralised retrocessional reinsurer Brit launched Norton Re Class 3 reinsurer Advent Re has and risk excess-of-loss reinsurance contracts, including collateralised to write catastrophe retrocessional been set up with $37.5 million in business for 2007 and 2008 to industry loss warranties (ILWs). business while Bermuda reinsurer capital to take advantage of attrac- Triomphe Re, its new Class 3 Harbor Point also announced the Harbor Point launched New Point tive market conditions to under- Bermuda sidecar. The quota share formation of a wholly-owned sub- Re, followed in January by Advent write a limited number of retroces- will be collateralised by a trust sidiary, Harbor Point Agency, to Re, set up by Lloyd’s firm Advent sional contracts, a segment of the established by Triomphe Re that provide all underwriting and man- Capital Holdings, and Triomphe reinsurance market in which the will include the total capitalisation agement services to New Point Re. Re, launched by Bermuda reinsur- Advent Group has participated as of Triomphe Re, as well as the John Berger, CEO of Harbor er Paris Re. Meanwhile, insurance a leading underwriter for over 30 ceded reinsurance premiums Point, said: “This is another oppor- broker Marsh has established a years. received from Paris Re. tunity for us to leverage our under- Bermuda property cat sidecar, Advent Capital (Holdings) is a Triomphe Re was capitalised writing expertise while meeting MaRI, which will reinsure ACE Lloyd’s insurer that manages and with approximately $185 million. client-specific needs.” on a quota-share basis. participates in Syndicate 780 and Norton Re, with initial capital for 2007 it will now also be able to of $107 million, will use the write business through Advent Re Marsh, ACE in ‘unique’ venture underwriting expertise of the Brit in Bermuda. Advent’s business is nsurance broker Marsh has erage,” Marsh said. Iannounced the creation of “Traditionally… a sidecar MaRI (Marsh Risk Innovations), a allows reinsurers to offer more Kiln joins Lloyd’s exodus “first-of-its-kind” insurance facili- capacity to their clients, the retail ollowing the lead of Hiscox and operations will ty designed to provide additional insurers. What makes the MaRI FCatlin, Kiln is the latest Lloyd’s be complemen- capacity to the depleted proper- structure innovative is that it pro- insurance firm set to join the move tary to Kiln’s ty catastrophe insurance market.
Load more

Recommended publications
  • Convergence Report-No1
    COMMITTED TO IMPROVING THE STATE OF THE WORLD Convergence of Insurance and Capital Markets A World Economic Forum Report in collaboration with Allianz Barclays Capital Deloitte State Farm Swiss Re Thomson Reuters Zurich Financial Services World Economic Forum October 2008 The Convergence of Insurance and Capital Markets is published by the World Economic Forum. The Working Papers in this volume are the work of the authors and do not represent the views of the World Economic Forum. World Economic Forum USA Inc. 3 East 54th Street 17th Floor New York, NY 10022 Tel.: +1 212 703 2300 Fax: +1 212 703 2399 E-mail: [email protected] www.weforum.org/usa World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 E-mail: [email protected] www.weforum.org © 2008 World Economic Forum USA Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system without explicit written permission from the World Economic Forum USA and the respective authors. REF: 091008 Order number: 1504095_08_EN Contents Foreword and Contributors 4 1 Executive Summary 6 2 The Existing Market for Insurance Risk 9 2.1 Market development 9 2.2 Market instruments 10 2.2.1 P&C bonds 10 2.2.2 Life bonds 12 2.2.3 Weather derivatives 13 2.2.4 Industry loss warranties 14 2.2.5 Cat swaps 14 2.2.6 Exchange traded cat risks 14 2.3 Market participants 15 3 Impediments
    [Show full text]
  • 2016 Sidley Global Insurance Review
    OFFICES BEIJING DALLAS LOS ANGELES SINGAPORE Suite 608, Tower C2 2001 Ross Avenue 555 West Fifth Street Level 31 Oriental Plaza Suite 3600 Los Angeles, California 90013 Six Battery Road No. 1 East Chang An Avenue Dallas, Texas 75201 +1 213 896 6000 Singapore 049909 Dong Cheng District +1 214 981 3300 +65 6230 3900 Beijing 100738, China NEW YORK +86 10 5905 5588 GENEVA 787 Seventh Avenue SYDNEY Rue du Pré-de-la-Bichette 1 New York, New York 10019 Level 10, 7 Macquarie Place BOSTON 1202 Geneva, Switzerland +1 212 839 5300 Sydney NSW 2000, Australia 60 State Street +41 22 308 00 00 +61 2 8214 2200 36th Floor PALO ALTO Boston, Massachusetts 02109 HONG KONG 1001 Page Mill Road TOKYO +1 617 223 0300 39/F, Two Int’l Finance Centre Building 1 Sidley Austin Nishikawa Central, Hong Kong Palo Alto, California 94304 Foreign Law Joint Enterprise BRUSSELS +852 2509 7888 +1 650 565 7000 Marunouchi Building 23F NEO Building 4-1, Marunouchi 2-chome Rue Montoyer 51 HOUSTON SAN FRANCISCO Chiyoda-Ku, Tokyo 100-6323, Japan Montoyerstraat 1000 Louisiana Street 555 California Street +81 3 3218 5900 B-1000 Brussels, Belgium Suite 6000 Suite 2000 +32 2 504 6400 Houston, Texas 77002 San Francisco, California 94104 WASHINGTON, D.C. March 2016 +1 713 495 4500 +1 415 772 1200 CENTURY CITY 1501 K Street N.W. Washington, D.C. 20005 1999 Avenue of the Stars LONDON SHANGHAI +1 202 736 8000 SIDLEY GLOBAL Los Angeles, California 90067 Woolgate Exchange Suite 2009 +1 310 595 9500 25 Basinghall Street 5 Corporate Avenue London, EC2V 5HA, United Kingdom 150 Hubin Road INSURANCE REVIEW CHICAGO +44 20 7360 3600 Shanghai 200021, China One South Dearborn +86 21 2322 9322 Chicago, Illinois 60603 +1 312 853 7000 sidley.com AMERICA • ASIA PACIFIC • EUROPE Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212 839 5300; One South Dearborn, Chicago, IL 60603, 312 853 7000; and 1501 K Street, N.W., Washington, D.C.
    [Show full text]
  • Global Reinsurance Guide 2015 Global Reinsurance Guide 2015 Contents
    Global Reinsurance Guide 2015 Global Reinsurance Guide 2015 Contents Overview 1 2015 Outlook: Global Reinsurance 2 Special Reports 8 Global Reinsurance’s Shifting Landscape 10 Alternative Reinsurance 2014 Market Update 16 Reinsurer Mergers and Acquisitions 24 Asian Reinsurance Markets 28 Latin American Reinsurance Markets 34 Global Reinsurers’ Mid-Year 2014 Financial Results 40 Summary of Company Reports 48 Alleghany Corporation 50 Arch Capital Group Ltd 51 AXIS Capital Holdings, Ltd 52 Berkshire Hathaway Inc. 53 Hannover Rueck SE 54 Lloyd’s of London 55 Munich Reinsurance Company 56 Reinsurance Group of America, Inc. 57 RenaissanceRe Holdings Ltd. 58 SCOR S.E. 59 Swiss Reinsurance Company Ltd 60 Validus Holdings, Ltd. 61 XL Group plc 62 Global Reinsurance Guide 2015 Contributors For information on Fitch’s rating Martyn Street process please contact: Senior Director, Insurance +44 20 3530 1211 [email protected] Europe/Middle East Lucinda Jeffrey + 44 20 3530 1350 [email protected] Brian Schneider David Turner Senior Director, Insurance + 44 20 3530 1442 +1 312 606 2321 [email protected] [email protected] North America/Bermuda Brad Istwan +1 312 368 3197 Siew Wai Wan [email protected] Senior Director, Insurance +65 6796 7217 Greg Hiltebrand [email protected] +1 312 368 5448 [email protected] Asia Chris Waterman Wayne Li Managing Director, Insurance + 852 2263 9915 +44 20 3530 1168 [email protected] [email protected] Additional
    [Show full text]
  • Willkie Insurance Industry Review Corporate and Risk Transactions, Regulation and Tax Developments
    Willkie Insurance Industry Review Corporate and Risk Transactions, Regulation and Tax Developments January 2021 Willkie Insurance Industry Review January 15, 2021 To Our Clients and Friends: As lawyers we are trained to anticipate the worst case and to always have a Plan B. This has served us well for the decades we have been advisors to the insurance industry during which we and our clients have experienced financial market dislocations and recessions, armed conflicts, natural catastrophes and terror events. But never have we experienced anything like COVID-19 and its public health, economic and social impacts. Long after this pandemic has been conquered we will be living with its consequences and the sobering and tragic human toll it has left in its wake. Before offering our insights and observations on a remarkable year, we would like to offer our thoughts and best wishes to our friends and clients who have been affected by this pandemic and to take note of the tremendous resiliency of the insurance industry and the essential role it plays in the global economy. We also wish to thank our clients for the privilege of advising them on many of the more significant transactions and issues involving the industry during this most unusual year. Sincerely, Insurance Transactional and Regulatory Practice Willkie Farr & Gallagher LLP Corporate and Risk Transactions, Regulation and Tax Developments i 2020 Year in Review I.Contents Review of M&A Activity I. Review of M&A Activity 1 ii. Credit-Linked Notes and ii. The FCA Test Case on Business A. United States and Bermuda 1 Collateral Notes vs.
    [Show full text]
  • ILS Annual Report 2019
    ILS Annual Report 2019 Alternative Capital: Strength Through Disruption Table of Contents Aon Securities’ Annual Review of the Catastrophe Bond Market . 4 Overview . 4 Catastrophe Bond Transaction Review . 7 ILS Investor Activity . 12 Aon ILS Indices . 16 ILS-Related Markets. 18 Collateralized Reinsurance Market Trends . 18 Sidecars . 19 Industry Loss Warranties (ILW) . 21 Private Placements . 22 Market Analysis by Region ................................... 24 North America . 24 Europe . 28 Asia Pacific . 29 Collateral Solutions ......................................... 33 Additional Collateral Solution Offerings . 35 Credit . 36 Market Participant Questionnaire ............................. 38 Foreword It is my pleasure to bring to you the twelfth edition of Aon Securities’ annual Insurance-Linked Securities (ILS) report . The study aims to offer an authoritative review and analysis of the ILS asset class and related developments in the market . This report is intended to be an important and useful reference document, both for ILS market participants and those with an active interest in the sector . Unless otherwise stated, its analyses cover the 12-month period ending June 30, 2019, during which time the market was uniquely tested . The period under review has been educational for market participants, as well as reassuring due to impaired bonds responding as designed . In the wake of 2017 and 2018, the suite of ILS transactions (i e. cat bonds, sidecars, collateralized reinsurance and industry loss warranties), and the mechanisms by which they respond, have been under the spotlight to a degree not seen before in the ILS market . USD5 4. billion of catastrophe bond issuance was secured in this period, and ILS capital in place has contracted from USD98 billion to USD93 billion .
    [Show full text]
  • The Contribution of Reinsurance Markets to Managing Catastrophe Risk
    The Contribution of Reinsurance Markets to Managing Catastrophe Risk Please cite this publication as: OECD (2018), The Contribution of Reinsurance Markets to Managing Catastrophe Risk, www.oecd.org/finance/the-contribution-of-reinsurance-markets-to-managing-catastrophe-risk.pdf. FOREWORD │ 3 Foreword Disasters present a broad range of human, social, financial, economic and environmental impacts, with potentially long-lasting, multi-generational effects. The financial management of these impacts is a key challenge for individuals, businesses and governments in developed and developing countries. Insurance markets can make an important contribution to the management of disaster risks by providing a source of funding for recovery and reconstruction in the aftermath of a disaster event and therefore reducing the financial burden on households, businesses and governments that would otherwise need to absorb these costs. The global reinsurance market, both traditional and alternative, provides an additional source of capital to mitigate these financial impacts, diversifying the risk away from the domestic economy and enhancing the capacity of primary insurers to provide affordable insurance cover for catastrophe risks. The Contribution of Reinsurance to Managing Catastrophe Risk makes use of a unique set of data on premiums and claims provided by global reinsurance companies to empirically examine the contribution that reinsurance has made to enhancing the capacity of the primary insurance market to manage catastrophe risk and reducing the economic and insurance market disruption that often follows catastrophic events. It examines the regulatory and supervisory measures that have been applied to risk transfer to reinsurance markets in the largest non-life insurance markets and the impact that these measures have had on the use of reinsurance and the ability of primary insurance markets to leverage the benefits of risk transfer to reinsurance markets.
    [Show full text]
  • Session 16: How Reinsurance Strategy Can Improve Your ERM Scorecard
    Session 16: How Reinsurance Strategy Can Improve your ERM Scorecard Moderator: Mario E DiCaro MAAA,FCAS Presenters: Lisa Gattel Chanzit MAAA,FCAS Brian Joseph O'Neill FSA,MAAA,CERA SOA Antitrust Disclaimer SOA Presentation Disclaimer HOW REINSURANCE CAN IMPROVE YOUR ERM SCORECARD 2018 ERM SYMPOSIUM –MIAMI, FLORIDA LISA G. CHANZIT, FCAS, MAAA, ARM LEARNING OBJECTIVES Reinsurance Decision-Making in an ERM Framework How reinsurance increases and decreases risk 3 case studies: Retention/structure decision Alternative risk transfer decision Insurance-linked security (ILS) Captive ©Risk & Regulatory Consulting LLC - Not to be Duplicated Without Prior Consent 2 REINSURANCE FUNCTIONS Expand Capacity to Write New/Additional Business Share Large Risks Among Insurers Spread the Risk of Potential Catastrophes Stabilize Underwriting Results Withdraw from a Line of Business Reduce Financial Leverage ©Risk & Regulatory Consulting LLC - Not to be Duplicated Without Prior Consent 3 SOURCES OF CAPITAL Traditional Reinsurance Supported by equity capital, with shareholders and a traditional capital model Recoveries backed by full faith and credit of Reinsurer Reinsurance Alternatives ‘New Money’ - Pensions, Hedge Funds, Mutual Funds Recoveries fully collateralized Focused on Property Catastrophe AKA Insurance-Linked Securities (ILS) ©Risk & Regulatory Consulting LLC - Not to be Duplicated Without Prior Consent 4 TRADITIONAL REINSURANCE Top 10 Global Reinsurance Groups (Life and Non-Life) Ranked by gross reinsurance premium written in 2016 (USD Millions) Source: AM Best data & research - September 5, 2017 Special Report ©Risk & Regulatory Consulting LLC - Not to be Duplicated Without Prior Consent 5 MARKET PARTICIPATION ©Risk & Regulatory Consulting LLC - Not to be Duplicated Without Prior Consent 6 TRADITIONAL REINSURANCE SOLUTIONS Quota Share – e.g.
    [Show full text]
  • Market Holds Breath As Irma Approaches
    Insight and Intelligence on the 2017 Reinsurance Rendez-Vous de Septembre 13 SEPTEMBER 2017 12 SEPTEMBER 2017 11 SEPTEMBER 2017 10 SEPTEMBER 2017 WEDNESDAY TUESDAY MONDAY SUNDAY Market holds breath as Irma approaches he global (re)insurance market is access to new sources of capital, albeit with thinly-capitalised local players following the Tmired in uncertainty as it follows the core returns under increasing pressure from drawback of the nationwides after earlier cat fate of Hurricane Irma, which has the compound rate reductions. events. potential to become the most expensive Sources have said that a $80bn-$100bn loss All buy to low attachment points and insured loss ever. would create signi cantly more distress, but will hand substantial losses to their treaty Irma, one of the most powerful storms in there is con dence that an event of this scale reinsurers, with the programmes of the history, has held the (re)insurance sector could be weathered without widespread nationwide and commercial writers also trans xed for days, with its projected failures. likely to deliver claims to cat writers despite track oscillating around the sector’s peak If the losses did mount to the their major retentions. exposures in Miami, and the stock market $125bn-$150bn range, sources suggested Traditional cat treaty reinsurers, operating oscillating in response to perceived clues on that market turmoil would ensue, with the with a global premium pool of around the possible scale of losses. potential for failures beyond the primary $20bn, could nd themselves carrying tens At the time of writing, the point where the Floridian property market, losses to the of billions of dollars of losses.
    [Show full text]
  • Alternative Capital and Its Impact on Insurance and Reinsurance
    ALTERNATIVE CAPITAL AND ITS IMPACT ON INSURANCE AND REINSURANCE MARKETS MARCH 2015 Robert P. Hartwig, Ph.D., CPCU President and Economist (212) 346-5520 [email protected] James Lynch, FCAS, MAAA Chief Actuary and Director of Information Services (212) 346-5533 [email protected] Insurance Information Institute 110 William Street New York, NY 10038 212.346.5500 EXECUTIVE SUMMARY The amount of capital used to support reinsurance1 worldwide has been growing quickly. Most of the growth continues to come from reinsurer and insurer profits, but significant new capital is pouring in from sources that barely existed 15 to 20 years ago. While these alternative capital arrangements have little impact on the typical policyholder, they have significantly affected the way reinsurance is being written worldwide. Alternative reinsurance capital is characterized by two twists on the traditional reinsurance arrangement. First, a new breed of investor is seeking out the reinsurance market—hedge funds, sovereign wealth funds, pensions and mutual funds. Second, the deals are structured differently. The new arrangements— catastrophe bonds, collateralized reinsurance and reinsurance sidecars—tend to isolate the investment from the rest of the capital supporting a reinsurer, thereby allowing the capital to enter and exit the market quickly. Alternative capital constituted 12 percent of the global reinsurance market at third- quarter 2014, more than double its market share at the end of 2010 (Figure 1).2 Aon Benfield Analytics estimates that alternative capital has tripled since 2008, growing considerably faster than traditional reinsurance capital. Growth in alternative capital is 15 percent of the overall growth of reinsurer capital in the same time period.3 (Figure 2) According to Aon, alternative capital had grown almost 25 percent from the end of 2013, and as of the third quarter 2014 stood at $61.9 billion.
    [Show full text]
  • Global Insurance Industry
    Practice Overview Global Insurance Industry Insurance-Linked Securities, Sidecars, Dedicated ILS Funds & Other Third Party Capital Management Insurance-Linked Securities, Sidecars, Dedicated ILS Funds & Other Third Party Capital Management TABLE OF CONTENTS Global Insurance Industry Group ................................................. 2 Insurance-Linked Securities ........................................................... 2 Sidecars, Dedicated ILS Funds & Other Third Party Capital Management ....................................................................................... 4 Other P&C Alternative Risk Transfers & Structured Finance ................................................................................................... 6 MAYER BROWN | 1 Known for: “Advising on significant Global Insurance Industry Group insurance transactions and possesses particular knowledge in the sidecar and Mayer Brown is a leading global law firm with 1,600 lawyers located in offices across the catastrophe bond spaces....they have Americas, Asia and Europe. an in-depth understanding of insurance-linked securities and life Our Global Insurance Industry Group represents industry reserve financing issues.” insurers and reinsurers, as well as brokers, banks ~ Chambers USA: Insurance and investors, in a range of transactional matters that include strategic mergers and acquisitions, Our New York, London and Chicago based team capital raising, and sophisticated insurance has represented clients in a wide variety of structured finance at the convergence
    [Show full text]
  • Asia Capital Re and Shenzhen Qianhai Agree Deal in Principle
    Insight and Intelligence on the 2016 Reinsurance Rendez-Vous de Septembre 14 SEPTEMBER 13 SEPTEMBER 12 SEPTEMBER 11 SEPTEMBER WEDNESDAY TUESDAY MONDAY SUNDAY Asia Capital Re and Shenzhen Qianhai agree deal in principle sia Capital Re looks set to secure biggest gathering, the broking sources said proposal at one stage, but from very early Aa $1bn sale to Chinese provincial they believed that management would still on in the process it was clear that it would government-owned entity Shenzhen be targeting full completion ahead of the be most highly prized by Chinese capital Qianhai Financial Holdings, The Insurance crucial 1 January renewals. looking for a mature vehicle that would Insider can reveal. allow it to bypass the growing pains of a Details of the proposed deal are being Underbidders start-up phase. closely guarded, but sources said that they Underbidders in the sale process, which Shenzhen Qianhai Financial Holdings is believed that an all-cash transaction valuing was superintended by Morgan Stanley, are a state-owned financial holding company Singapore’s biggest reinsurer at 1.25x-1.3x understood to have included Hong Kong- founded by the authority of the Qianhai trailing book value had already been agreed listed property and finance business Mason Shenzhen-Hong Kong Modern Service in principle, with an announcement believed Financial, Sirius owner China Minsheng Industry Cooperation Zone. to be imminent. Investment and Chinese conglomerate The state-owned vehicle has already It is understood that the price and terms Fosun. concluded a joint venture with HSBC to enter for the $791mn-equity business have been Most observers in the sector will consider the banking space, and is believed to have negotiated, with financing for the deal in the valuation a rich multiple for the other interests or prospects in insurance and place.
    [Show full text]
  • Insurance Transactions and Regulation
    NEW YORK WASHINGTON HOUSTON PARIS LONDON FRANKFURT BRUSSELS MILAN ROME Developments and Trends in Insurance Transactions and Regulation 2015 YEAR IN REVIEW January 19, 2016 To Our Clients and Friends: We are pleased to present our 2015 Year in Review. In it we review the year’s most important developments in insurance transactions and regulation, including developments relating to mergers and acquisitions, corporate governance and shareholder activism, insurance-linked securities, alternative capital, traditional capital markets transactions, and the regulation and taxation of insurance companies, both in the United States and internationally. We hope that you find this 2015 Year in Review informative. Band 1 for Insurance – Transactional and Regulatory Please contact us if you would like further information about any Chambers USA of the topics covered in this report. Nationwide and New York | 2015 and 2014 Sincerely, Insurance Practice Group of the Year Law360 2015 and 2014 Corporate Insurance and Regulatory Group Willkie Farr & Gallagher LLP #1 Legal Adviser in Insurance M&A SNL Financial Based on number of deals over prior two years #1 Issuer’s Counsel for U.S. Insurance Capital Markets Offerings Thomson Reuters 2015 and 2014 “One Firm I Would Not Want to Be Without” Client quote in Chambers USA 2015 “Excellent and Responsive” Team in London Client quote in Legal 500 UK 2015 Developments and Trends in Insurance Transactions and Regulation 2015 Year in Review Table of Contents I. Review of M&A Activity in 2015 1 IV. Developments and Trends in I. New York Developments 47 A. Market Trends – North America 1 Longevity, Pension Close-outs and 1.
    [Show full text]