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

This panel discussion took place at the Artemis ILS Asia 2023 conference in Singapore on July 13th.  This session was moderated by Michael Dunsire, Regional Director, APAC, Aon Insurance Managers.  The panellists taking part were: Simon Goh, Partner, Head of Insurance & Reinsurance, Rajah & Tann; Matthew Song, Executive Director, Head of Corporate and Institutional Client, SGX Group; Tim Yip, Executive Director & Portfolio Manager, ILS Advisers / HSZ Group; Scott McHardy, Head of Risk Finance, Toka Tū Ake EQC.  Momentum surrounding Singapore's ILS market hub continues to build, and this panel featured a discussion about the future of ILS in the country and what is needed to sustain ILS as a component of Singapore's broader financial activities.  The group discussed the current status of the Singapore ILS regulatory offering, as well as recent changes to the Singapore ILS Grant Scheme.  They also explored the broader potential for use of insurance-linked securities (ILS) within Singapore and the Asia Pacific region.  In addition, a recent first-time catastrophe bond sponsor on the panel, in Scott McHardy, Head of Risk Finance, Toka Tū Ake EQC, discussed the experience of using Singapore as a cat bond issuance domicile and explained how the regulator and service providers had supported the EQC through that process.  Listen to the full podcast episode to learn more about the insurance-linked securities (ILS) market in Singapore, the Singapore ILS regulatory regime and the continued investment that the country is making in developing a sustainable ILS hub component within its capital market.

This keynote speech took place at the Artemis ILS Asia 2023 conference in Singapore on July 13th.  This session featured Stefan Kräuchi and Tim Yip of Hong Kong based ILS investment manager and advisory firm ILS Advisers, which is part of the HSZ Group, discussing the Asian ILS investor landscape from their vantage point of being the only asset manager with a focus on the asset class that is located in the region.  The pair discussed some of the characteristics of ILS investors in the Asia region, as well as the ILS opportunities to invest in insurance risk originated from that part of the world.  They also explored the insurance and reinsurance landscape and why, despite having some of the largest reinsurers based there, Asian companies are so far not as advanced in managing ILS capacity themselves.  In addition, the ILS Advisers duo explored reasons for ILS having a slower uptake in Asia and what holds back more Asian insurance risk making it into the ILS market.  Listen to the full podcast episode to learn more about the Asian insurance-linked securities (ILS) market, its investor base and the market conditions in this location.

Christian Mumenthaler, CEO of Swiss Re, discusses the sustained hard reinsurance market and the need for reinsurers to become more profitable. He explores topics such as reinsurance market efficiencies, the protection gap, secondary perils, and the outlook for reinsurance renewals. The podcast also touches on the impact of natural catastrophes and COVID on the industry, as well as the future of reinsurance and the influence of the macroeconomic environment.

This fireside chat interview took place at the Artemis ILS Asia 2023 conference in Singapore on July 13th.  This session featured a discussion with Lorenzo Volpi, Deputy CEO and Managing Partner of specialist insurance-linked securities (ILS) investment manager Leadenhall Capital Partners, focusing on his firms operations as a diversified ILS investment manager.  Volpi discussed the benefits of having a diversified range of strategies available for investors, with funds focused on both the P&C and life sides of insurance and reinsurance opportunities.  Volpi went on to explore some of the priorities Leadenhall Capital Partners has at the moment, as well as his thoughts on the ILS market within Asia specifically.  He then spoke about the current ILS and reinsurance market dynamic, highlighting the attractive investment opportunity it currently presents.  Listen to the full podcast episode to learn more about the operations of a diversified ILS investment manager, as well as Lorenzo Volpi's thoughts on Leadenhall Capital Partner's priorities and market conditions today.

This opening keynote speech was delivered at the Artemis ILS Asia 2023 conference in Singapore on July 13th.  During his speech, Cheng Khai Lim, Executive Director, Financial Markets Development Department at the Monetary Authority of Singapore (MAS), highlighted the importance of building out greater structuring and deal capabilities in the Asia region, as Singapore continues to streamline its insurance-linked securities (ILS) regulatory regime.  He discussed growth prospects for insurance-linked securities (ILS) markets globally and in the Asia region.  In particularly, he pointed to the need for significant reinsurance protection from traditional and also non-traditional sources, such as the capital markets, to better protect against rising losses from natural catastrophes in the region.  Lim said that the Monetary Authority of Singapore (MAS) is committed to supporting the establishment of ILS structuring capabilities and growing ILS issuance in Singapore.  The Monetary Authority of Singapore (MAS) will also continue to support catastrophe bond and insurance-linked securities issuance in the Asia and Pacific region through the extension of its ILS grant scheme by a further three years, to run until the end of 2025.  Listen to this full podcast episode to learn more about the activities of the Monetary Authority of Singapore (MAS) in fostering insurance-linked securities (ILS) activity in Asia and Singapore.

The insurance-linked securities (ILS) fund manager community continues to deal with trapped collateral from previous catastrophe years, but the opportunity cost has grown, we learned in our latest Artemis Live video interview.  Our latest Artemis Live video interview is with Megan Green, a Partner in the PwC Bermuda Asset Management Assurance Group.  Green's work is focused on providing assurance services to clients in the asset management industry including insurance linked securities providers and she joined us to discuss insurance-linked securities (ILS) asset management activity in Bermuda today.  Green highlighted trapped collateral as a continuing issue for ILS fund managers and one that now comes with an increasing opportunity cost.  She explained that alongside investor appetite and capital raising, trapped collateral remains the other hot-topic for ILS managers.  "That's been an issue for a few years now, but we are seeing collateral get released, which is great," Green said.  But continued, "I think in this market, with rates being as strong as they are, it almost shows that the opportunity cost of that trapped collateral is greater. "So it's probably getting an even greater focus, because obviously investors and ILS managers would love that to be deployed."  While trapped, this collateral and capital cannot be recycled to be put to work in fresh reinsurance arrangements, which in the hard market environment would come with significantly higher-yields than the arrangements that now see collateral still trapped.  Green went on to say that, "It'll be interesting to see what happens in that space. You know, you obviously have your commutations that are going on. But, there's chatter about whether standard commutation clauses are put in contracts, if that solves the problem. So I'll be interested to see what happens."  Listen to the full podcast episode for more insights from PwC Bermuda's Megan Green.

Insurers have lost control of their claims frequency, the speakers in our latest Artemis Live video interview explained, as technology enabled claims instigation has exploded, driving a significant increase in litigated claims. For our latest Artemis Live interview we spoke with Joe Petrelli, who is well-known in the industry as the President and Co-Founder of rating agency Demotech and now also a co-founder of 4WARN Inc, and Todd Kozikowski, CEO, co-founder and shareholder of 4WARN, INC.  This is a little different to our typical interviews as we wanted to allow the speakers to get the data across, so there is a presentation involved as well. If you're listening to the podcast and want to see the slides, please find our YouTube channel for Artemis.bm. Joe and Todd have been working closely together to deliver insights for the insurance and reinsurance industry that have previously been masked or hidden, but are extremely pertinent today. Specifically, they have undertaken significant work to mine and analyse data, to help insurers and reinsurers better understand some of the causes of the explosive claims litigation trends affecting the industry today, especially in the United States. 4Warn Inc. is a relatively new venture the pair have established to provide awareness of tech-enabled claim instigation, to assist carriers and third parties remediate claim instigation.    They define tech-enabled claim instigation as the confluence of litigation funding, litigation marketing, litigation financing and search engine optimization to initiate claims. Viewers and listeners to our podcast will be only too familiar with the claims inflation and loss amplification trend seen in catastrophe events over the last few years, in Florida and other regions.  The work Joe and Todd have been and continue to do, sheds light on murky practices that are ramping up claims inflation today and causing issues to insurers and reinsurers, while also contributing to the challenges of insurability we see with some carriers exiting regions that are both catastrophe or climate affected, but importantly some of the most affected by litigation too. Listen to this full episode to learn more about the way digital techniques are weaponising insurance claims litigation, driving a significant elevation in claims frequency through to insurers, with ramifications for reinsurance and ILS market interests.

Parametric insurance solutions continue to be more broadly adopted, but the technology behind their triggers is also critical and solutions are developing fast.  Artemis recently spoke with Callum Higgins from Moody’s RMS, a Product Manager for Moody’s RMS event response services, and Martin Hotz, Head Parametric Nat Cat at Swiss Re Corporate Solutions, to learn more about how parametric triggers are used in hurricane insurance and risk transfer today.  The pair discussed advanced catastrophe risk modelling tools and their application in delivering parametric risk transfer solutions, with a particular focus on hurricane risk and the Moody’s RMS HWind product.  Higgins explained some of the use-cases for the HWind product in risk transfer and said that, "Specifically, in the insurance-linked securities space, around live cat trading for instance, making decisions around that, but also on the investor relations side. So being able to communicate to your investors while the storms approaching lands, what that could mean for the funds, for instance.  "The ILS space is one area we've seen HWind forecasting in particular being used quite a lot."  Hotz highlighted how Swiss Re uses the HWind product, saying, "We offer parametric hurricane insurance to our commercial insureds based on the wind-speed data from Moody's RMS and their HWind real-time data and we have issued our first policy that settles based on HWind back in 2016.  "So we're now in our eighth hurricane season of providing such cover and did pay also in some of the industry-shaping events over the past couple of years.  "For us, HWind meets the criteria of being a fast, independent and reliable data service, which as with any parametric policy is always at the core."  Listen to this full podcast episode for insights into parametric insurance and risk transfer, as well as the role of models and real-time data in parametric triggers.

This was the fourth session of the day at our Artemis ILS NYC 2023 conference, held in New York on February 10th 2023.  This conference was Artemis' largest insurance-linked securities (ILS) event to-date, with over 390 registered attendees enjoying a wide-range of insightful speaking sessions and networking opportunities throughout the day.  Attendees came from around the world to hear thought-provoking discussions from insurance-linked securities (ILS) market leaders, all under the theme of "(Re)construction & Renewal(s)."  This fourth session from our ILS NYC 2023 conference features a panel discussion focused on new opportunities within insurance-linked securities (ILS) and catastrophe bonds, titled: (Re)newed opportunities - Where next and how to get there.  The panel discussion was moderated by Tom Johansmeyer, Head of PCS, Verisk Insurance Solutions (now of Inver Re).  He was joined by: Julia Henderson, Chief Commercial Officer (CCO), Vesttoo; Chris Caponigro, Global Head, AXIS ILS, AXIS Capital; and Michael Millette, Founder & Managing Partner, Hudson Structured Capital Management.  The discussion was wide-ranging and saw panellists speaking about many of the opportunities they see as tangible areas to expand the ILS asset class into.  Speaking from their extensive experience, the panellists noted the need for continued work in educating investors, about the new opportunities available in ILS, plus their expectation that market growth could come just as quickly from non-catastrophe areas of ILS, as it will from the more traditional catastrophe business lines.  Listen to the full podcast audio from this panel discussion for more insights into how the insurance-linked securities (ILS) and catastrophe bond market continues to expand its horizons, to new classes of business and opportunities.

Two competing factors are set to drive the conversation during the 2023 Atlantic hurricane season, as well as the risk. But there are other important areas insurance, reinsurance and ILS market interests should remain alert to, according to Jeff Waters of Moody's RMS.  Jeff Waters is a meteorologist and has been the Product Owner for the RMS North Atlantic Hurricane Models since 2018.  He’s been at the company for over a decade in roles focused on hurricane modelling and joined us to discuss the hurricane season just as it officially began.  Commenting on the forecasts we've reported on, Waters said, "The majority of the forecasts tended to focus on two competing factors, the first is the the ENSO state, the other competing factor is the sea surface temperatures in the Atlantic basin, those continue to be well above average.  "So you have two different competing items happening and I think in a lot of instances, the forecasts that are coming out for this season, are are almost expecting the two to offset each other to an extent."  He went on to explain the uncertainty this presents though, not least due to timing, saying, "Some of the more recent forecasts that have come out have started to deviate from that, that average range there, so certainly pointing to some of the uncertainty that could play out over the next four to six months, especially if one of those signals, whether it be the state of the basin in terms of sea surface temperatures, or the transition to an El Nino state, if one of those happens earlier or later than expected.  "Or perhaps the El Nino state isn't quite as strong as it's currently projected to be, that could have a direct influence on how the season plays out in terms of hurricane hurricane activity and the total number of named storms."  Waters went on to discuss how these climate signals could translate into direct risk for US landfalls, what insurance, reinsurance and ILS markets should be watching closely and how to think about the latest risk modelling tools that can assist with analysing hurricane risk this season.  Listen to the full podcast episode for many more insights into the 2023 Atlantic hurricane season from Moody's RMS' Jeff Waters.