Artemis Live - Insurance-linked securities (ILS), catastrophe bonds (cat bonds), reinsurance

For this one of our sponsor showcase video interviews, for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed Vincent Prabis, Managing Principal at Hiscox ILS, one of our Gold sponsors for the conference.  As ever, we’re looking at the development of the insurance-linked securities (ILS) market with one eye to the future, as is the way with Artemis’ ILS events. You can register for the event online here: https://www.artemis.bm/ils-nyc-2022/  Hiscox ILS is the dedicated insurance-linked securities (ILS) investment fund management unit of the global Hiscox re/insurance group and with broad access to originate business, as well as an established ILS fund franchise, Prabis explained that Hiscox ILS is targeting growth in the improved market conditions of 2022.  Prabis discussed market conditions and how Hiscox ILS is positioned after the key January reinsurance renewals.  He revealed that Hiscox ILS was successful in raising some new funds from its investors for 2022 and Prabis said that Hiscox ILS is aiming to grow through the rest of this year, while the market is so favourable.

For this one of our sponsor showcase video interviews, for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed Brittany Baker, Director of Technical Sales at CyberCube, one of our Gold sponsors for the conference.  As ever, we’re looking at the development of the insurance-linked securities (ILS) market with one eye to the future, as is the way with Artemis’ ILS events. You can register for the event online here: https://www.artemis.bm/ils-nyc-2022/  CyberCube is a specialist in cyber risk modelling and with this being an area of insurance and reinsurance that has often been described as capacity deprived, for numerous reasons, CyberCube has ambitions to help unlock ILS capacity to support cyber risk underwriting using its advanced technology and risk models.  Baker explained that education and transparency remain key, in encouraging new capital sources into the cyber insurance and reinsurance market.  "As insurance groups are able to better understand them a more clear narrative will emerge and it will be easier to demonstrate, even to those who are not cyber security experts. I think that will allow us to bridge the gap between the ILS investor base and the insurance industry," she explained.

For this one of our sponsor showcase video interviews, for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed senior executives from major global re/insurer AXIS Capital, one of our Gold sponsors for the conference. Joining us were: Ann Haugh, President of Global Property, Reinsurance; Katie Partington, Chief Underwriting Officer, Reinsurance; and Chris Caponigro, Global Head of AXIS ILS. As ever, we’re looking at the development of the insurance-linked securities (ILS) market with one eye to the future, as is the way with Artemis’ ILS events. You can register for the event online here: https://www.artemis.bm/ils-nyc-2022/  We discussed how AXIS Capital has been utilising third-party capital and partnering with investors within its underwriting operations and what the executives foresee for the future use of ILS at the company.  AXIS Capital has been leveraging third-party capital within its underwriting business for more than a decade, and the unit dealing with this was rebranded AXIS ILS last year and has been staffing up ever since, suggesting a growing focus.  The company is open to partnering with insurance-linked securities (ILS) investors on a wide-range of risks and believes all of its portfolios of insurance and reinsurance risk have the potential to be attractive to investors.

For this one of our sponsor showcase video interviews, for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed Lorenzo Volpi, Managing Partner at specialist ILS and reinsurance investment manager Leadenhall Capital Partners, one of our Gold sponsors for the conference. As ever, we’re looking at the development of the insurance-linked securities (ILS) market with one eye to the future, as is the way with Artemis’ ILS events. You can register for the event online here: https://www.artemis.bm/ils-nyc-2022/  Volpi provided an update on investor trends in the insurance-linked securities (ILS) space, explaining that after a series of catastrophe losses in 2021, investors have become increasingly curious and want to understand how ILS fund managers, like Leadenhall, are applying lessons learned.  In addition, investors are seeking to understand how ILS managers are positioning themselves to take advantage of opportunities in the current reinsurance market environment.  While other key investor trends are, as you might expect, climate change and climate risk, as well as environmental, social and governance (ESG) issues.  "Ultimately investors welcome client-servicing intimacy and an open and transparent dialogue, because the investment long-term benefits should be obvious to everyone and you don't want to surprise them, of course," Volpi said in the interview.

For this one of our sponsor showcase video interviews, for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed Thomas Nuth, the Vice President of Marketing at DeNexus, one of our Bronze sponsors for the conference.  DeNexus is a specialist provider of software for cyber risk quantification and its DeRISK Insurance product enables quantification of the cyber risk of industrial enterprise clients and client portfolios for underwriters, helping reinsurers and ILS investors gain visibility and understanding of cyber risks they may face.  Thomas explained the DeNexus approach to cyber and in particular what its DeRISK Insurance product offers to insurers, reinsurers and ILS investors looking to underwrite or allocate capital to cyber risks.  He also went on to provide detailed thoughts on some of the threat vectors the insurance, reinsurance and ultimately ILS investor markets may face, as well as how DeNexus is developing its tools to help risk markets make more sense of cyber exposure and threats.

For this one of our sponsor showcase video interviews, for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed Tom Johansmeyer, Head of PCS, part of the Verisk group of companies, and our Headline sponsor for the event.  As ever, we’re looking at the development of the insurance-linked securities (ILS) market with one eye to the future, as is the way with Artemis’ ILS events.  To that end, Tom had some particularly interesting and highly relevant views to share on political violence and also cyber terrorism, two areas of the insurance and reinsurance market that are not yet staple perils for insurance-linked securities (ILS) investors, but that Tom believes could become so in time.  In particular, Tom believes that recent trends are driving increasing risks of political violence, unrest and also cyber attacks, making the development of additional risk capital sources and new risk transfer products to address these exposures increasingly important.

In this episode of the Artemis.bm podcast we review the record year of catastrophe bond issuance that was seen in 2021 and comment on the twenty-five year anniversary of a landmark transaction from late 1996. We also discuss the important role insurance-linked securities (ILS) play as a form of reinsurance capital structure, with the cat bond increasingly a key source of reinsurance, retrocession and importantly insurance capacity for a growing base of sponsors. We also summarise the changes we've made to help you track catastrophe bond and ILS market activity more accurately, explaining decisions taken to enhance our charts and data service for you. Finally, we look ahead to 2022 and discuss some of the potential catalysts that could turn this year into another record-setting one for the catastrophe bond market.

For our latest Artemis Live interview we wanted to understand how the industry loss from Hurricane Ida has been developing and explore the complexities in the reconstruction and recovery that could impact just how high the insurance and reinsurance market loss could rise.  Who better to do that with than executives from Property Claim Services (PCS), a division of Verisk, so we were joined by Tom Johansmeyer, Head of PCS and Ted Gregory, Director of Operations, PCS and ISO Claims Analytics for this video interview.  Estimates for the industry loss from Hurricane Ida still range from as low as $25 billion to as high as $40 billion, sometimes above, so it's clear at this stage there is no consensus.  In order for the market to really understand what’s going on, it’s important to look at the facts on the ground and the claims data flowing through the market from underwriting companies.  Hence, our discussion with PCS in this interview hopes to provide some more detail as to what's being seen on the ground in Louisiana, as well as further afield and how that will potentially influence the continued development of losses from Hurricane Ida.  Listen to this episode to learn more about the on-the-ground situation in Louisiana after Hurricane Ida, as well as to better understand some of the complexities that may drive loss creep and claims amplification.

Our latest Artemis Live video interview saw us exploring the importance of climate risk models in the management of portfolios of reinsurance and insurance-linked securities (ILS), with senior executives from Aeolus Capital Management.  Aeolus' Head of Research, Dr. Pete Dailey, and Partner, and Chief Analytics Officer Frank Fischer, joined us to discuss the importance of climate models in their work and how these tools are improving.  We also explored how Aeolus is leveraging climate modelling, data, and analytics, to inform its portfolio construction and management, asking Dailey and Fischer how they see the use of climate inputs to ILS decision-making evolving.  Taking into account climate change related factors in how reinsurance-related risks are modelled, assessed and selected for portfolios, is deeply integrated into the processes followed by Aeolus.  It's also critical to explain how climate is factored into decision-making, when it comes to having conversations with ILS investors, Dailey and Fischer explained.

Recently we hosted a live webcast in association with Genpact, on the use of technology within the reinsurance space and the importance of data. The insightful discussion explored the industry’s current use of technology and ability to adopt new processes, with a view to what this might mean for the future of the reinsurance market as it looks to progress and innovate. Our panellists for the webcast were from Genpact, Swiss Re, Google and Tremor Technologies and they all agreed that the reinsurance industry's data and tech maturity is increasing, but that there is a lot more to be done. “If I was to think about where the industry is and how it has leveraged the opportunities, I think it’s a little bit of a mixed bag, in my view,” said Sameer Dewan, Global Business and Digital Transformation Leader, Insurance, Genpact. One of the positives, according to Dewan, is that the reinsurance industry in particular has made great strides with its catastrophe risk modelling by leveraging new data sets extensively, and evolving its understanding of natural hazards. Dewan also noted that solid progress is being made around how the market manages its data and governance, although warned that there’s still a long way to go here. “What I mean by that, is it’s not just data within the organization that they have across multiple systems, both manual and some more automated processes, but also how data is managed in the ecosystem and how the data transfer plays out. I think that’s a huge opportunity,” he said. The second piece, he continued, is the under investment in reinsurance core technology. “There are technologies in play, but I don’t think they necessarily meet the needs of the complexities that we have to deal with today. A lot of the work is still performed manually. Having said that, I think we are at a tipping point,” said Dewan.