Our Scans · (FS.4.01) Insurers' Business Model · Weekly Summary

• [New] The Bayou Re 2024-1 cat bond notes will once settled protect Louisiana Citizens with $275 million of reinsurance against named storm losses on an indemnity trigger and per-occurrence basis, across a three-year term. Artemis.bm
• [New] As with all of the FloodSmart Re catastrophe bonds, the reinsurance protection secured will cover the NFIP against flood losses arising from US named storm events, across a three-year term and on an indemnity and per-occurrence trigger basis. Artemis.bm
• [New] As we reported, Citizens Property Insurance Corporation could increase its purchase of reinsurance and catastrophe bond backed risk transfer in 2024, with a new layer structure following the merging of its accounts that suggests as much as $5.5 billion could be purchased in 2024. Artemis.bm
• Despite a strategic move up the risk tower, collateralized reinsurance capacity, estimated at $42 billion to $50 billion, remained below layers covered by catastrophe bonds, indicating a continued shift in capital towards catastrophe bonds and a preference for investing in remote risk layers. Insurance Business
• Arrangements made between EU insurers and UK reinsurers will only qualify as risk mitigation techniques under Solvency II if the UK reinsurer (protection provider) meets the minimum credit rating referred to above, or if there are qualifying collateral arrangements in place. Conventus Law
• GIB is now wholly owned by Aon and will formally integrate with Aon India Insurance Brokers (AIIB) following the finalization of the National Company Law Tribunal merger process which is expected later this year. Media Outreach
• Outside of property, Moody's expects demand for casualty reinsurance to remain solid, with buyers showing greater interest in facultative covers as they explore alternative ways of lowering volatility. Reinsurance News
• Property cat reinsurance prices to slow meaningfully: Goldman Sachs Equity analysts at Goldman Sachs are expecting a meaningful slow-down in property catastrophe reinsurance pricing through 2024 and perhaps beyond, but at least for the year ahead, they are not anticipating any meaningful decline. Artemis.bm
• Hannover Re anticipates a minimum of 5% growth in reinsurance revenue, with property and casualty reinsurance expected to see higher growth rates than life and health reinsurance. Insurance Business
• The intensity of global risks necessitates continued vigilance and underwriting discipline to stabilize the reinsurance cycle and address the evolving nature of 21st-century risks. Insurance Business
• Amid a shift towards normalcy during reinsurance renewals, the property insurance sector is expected to maintain a positive rate environment through the first half of the year. Insurance Business
• Broking giant Aon has said today that it anticipates an influx of capital to the parametric risk transfer space in 2024, from traditional insurance, reinsurance and ILS fund sources. Artemis.bm
• The reinsurance sector witnessed an increase in capacity towards the end of the year, attributed to a resurgence in capital and robust returns from reinsurers, which are projected to be around 20% for 2023. Insurance Business
• The Class A notes are targeted to provide $200 million in named storm reinsurance protection for the state of Texas, on an indemnity trigger and per-occurrence basis, over a three year term to the end of 2026. Artemis.bm
• US demand for catastrophe XOL reinsurance remains strong, and will grow by as much as 15% in 2024, according to Deloitte, says Moody's. Reinsurance News
• The Property & Casualty (P & C) insurance sector is witnessing a shift as primary insurers retain more risk following the raising of attachment points by reinsurers looking to reduce frequency losses to offset years of poor returns. Reinsurance News
• For the property and casualty reinsurance segment, Swiss Re expects to reach combined ratio of less than 87%, while it targets a combined ratio of less than 93% for the corporate solutions business. Morningstar, Inc.
• Up to €5bn new catastrophe reinsurance demand in EMEA Swiss Re said that it anticipates rising demand for natural catastrophe reinsurance, with €5 billion of additional demand expected for the EMEA regions cedents alone in 2023. Artemis.bm
• Fitch forecasts an improvement in underlying profitability for the global reinsurance sector in 2024 on continued strong underwriting margins and rising investment income, which will continue to bolster earnings. Insurance Journal
• While investor flows have been harder to win, some of the collateralized reinsurance strategies are receiving much more interest now and we do expect positive flows in 2024 to many of them, as long as catastrophe loss activity falls within expectations. Artemis.bm
• Demand for catastrophe reinsurance is expected to grow by 15% in 2024, with catastrophes in 2022 causing $1 billion in losses and ultimately driving up costs by 30.1% in 2023. Insurance Business
• The World Bank's position on the use of disaster insurance and risk transfer backed by private capital markets and reinsurance capacity has been building over the last few years. Artemis.bm

Last updated: 23 April 2024