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

Christian Mumenthaler, the CEO of Swiss Re believes that the reinsurance market will continue to harden significantly, as so far the price gains made by the industry have been largely eaten up by issues elsewhere that affect the reinsurance balance-sheet.  Mumenthaler joined us for a new Artemis Live interview just before the Monte Carlo Rendez-vous 2022.  We discussed the current state of the reinsurance market, his expectations for year-end renewals, how his firm Swiss Re is managing global challenges, and the importance of alternative capital and insurance-linked securities (ILS) activities at the company.  Mumenthaler explained the Swiss Re view on global reinsurance market conditions and rate adequacy in the sector at this time, saying that rate hardening so far has been eaten up by live issues, leading him to predict further "significant" hardening at the January 2023 reinsurance renewals.

This is the fourth session from our Artemis ILS NYC 2022 conference, held in New York City on April 22nd, 2022.  This was the largest insurance-linked securities conference in the world since our last in Feb 2020, prior to the pandemic.  Over 200 attendees assembled in New York to hear industry expert speakers under the theme of "(Re)setting the scene", discussing the future of the insurance-linked securities (ILS) market as the COVID-19 pandemic abates and the industry adjusts to another year of catastrophe losses.  This was the fourth session of the conference and featured a lively debate on the topic of responsible investing and what that means for insurance-linked securities.  The panel discussed the fact the ILS asset class already provides responsible protection and so responsible investment opportunities, but how can this be built on and expanded in the coming years, and also asked what climate and ESG mean in the context of ILS investment strategies.  This session was moderated by: Tom Johansmeyer, Head of PCS, Verisk Insurance Solutions. Participants were: Lorenzo Volpi, Managing Partner, Leadenhall Capital Partners LLP; Tanya Watters, Vice President, ILS, Neuberger Berman; and Craig Hupper, SVP & MD, Environmental, Social and Governance, TransRe.

Our latest Artemis Live interview from June 2022 is with Niklaus Hilti, Head of ILS at specialist investment manager Credit Suisse Insurance Linked Strategies. Hilti joined us at a particularly busy and interesting time for the reinsurance, insurance-linked securities (ILS) and broader capital markets.  We discussed the macro-economic environment and how that plays into reinsurance and ILS market trends, as well as the catastrophe bond market, the mid-year 2022 reinsurance renewals, the state of Florida's property insurance market and the outlook for the rest of the year.  Hilti also explained how his firm, Credit Suisse Insurance Linked Strategies, has been working hard to deliver on its promises to investors, taking advantage of hardening reinsurance market conditions to reposition its portfolio and tighten up terms and conditions.  One topic of focus in this interview is the global inflationary environment and how inflation needs to be factored into reinsurance and ILS market pricing.  He explained, "If today a hurricane or earthquake event happens again, a historical one, it would be significantly more expensive than what is captured already in the most update model version.  "Then if you look at cat bonds, let's say a three year placement, you have to think as well, what's the claims inflation over the next three years.  "It's something which needs to be factored in and that raises the question of how adequate is the pricing, or how much did we really see a real, real increase of margin or premium with the latest premium increases. For us, that is the most critical question at the moment."

This is the third session from our Artemis ILS NYC 2022 conference, held in New York City on April 22nd, 2022.  This was the largest insurance-linked securities conference in the world since our last in Feb 2020, prior to the pandemic.  Over 200 attendees assembled in New York to hear industry expert speakers under the theme of "(Re)setting the scene", discussing the future of the insurance-linked securities (ILS) market as the COVID-19 pandemic abates and the industry adjusts to another year of catastrophe losses.  This was the third session of the conference and featured a vibrant discussion on the topic of why the ILS market needs to become increasingly differentiated, in order to offer investors choice and ensure it can meet ceding company needs, as well as how much progress is really being made in expanding the ILS asset class into new classes of insurance and reinsurance business.  This session was moderated by: Stephan Ruoff, Head of ILS, Schroders Capital.  Participants were: Brittany Baker, Director - Technical Sales in Growth, CyberCube; Rob Hauff, Portfolio Manager, Vesttoo; and James Lee, Managing Director, Aspen Capital Markets.

This is the second session from our Artemis ILS NYC 2022 conference, held in New York City on April 22nd, 2022. This was the largest insurance-linked securities conference in the world since our last in Feb 2020, prior to the pandemic. Over 200 attendees assembled in New York to hear industry expert speakers under the theme of "(Re)setting the scene", discussing the future of the insurance-linked securities (ILS) market as the COVID-19 pandemic abates and the industry adjusts to another year of catastrophe losses. This was the second session of the conference and featured an insightful conversation about how the ILS market can capitalise on its successes, while broadening access to its products and investment opportunities, with a particular focus across catastrophe bonds, as well as discussion of other reinsurance-linked arrangements and investments. This session was moderated by: Judith Klugman, Head ILS Sales, Swiss Re. Participants were: David Flitman, CEO, Safepoint Insurance; Chris Caponigro, Global Head, AXIS ILS; Philipp Kusche, Global Head ILS & Capital Solutions, TigerRisk Capital Markets & Advisory.

This is the first session from our Artemis ILS NYC 2022 conference, held in New York City on April 22nd, 2022.  This was the largest insurance-linked securities conference in the world since our last in Feb 2020, prior to the pandemic.  Over 200 attendees assembled in New York to hear industry expert speakers under the theme of "(Re)setting the scene", discussing the future of the insurance-linked securities (ILS) market as the COVID-19 pandemic abates and the industry adjusts to another year of catastrophe losses.  This was the first session of the conference and featured a focused discussion on the importance of the ILS asset class reducing surprises where possible, delivering transparency and keeping investors and counterparties informed.  The session was moderated by Ben Fox, Principal, Portfolio Manager, Hiscox ILS.  Participants were: Matthew Ball, Senior Director, WTW; Cory Anger, Managing Director, GC Securities; and Matthew Berdoff, Head of IR & Fundraising, Hudson Structured Capital Management.

This new Artemis Live interview from May 2022 is with Luca Albertini, CEO of specialist insurance-linked securities (ILS) investment manager Leadenhall Capital Partners.  Albertini joined us to discuss market conditions in insurance-linked securities (ILS) and catastrophe bonds, as the mid-year reinsurance renewals approach.  He explained that there are multiple forces affecting the ILS and cat bond sector, but also that the legacy effects of softened terms and conditions are important to rectify.  Albertini noted that there has been "a lot to distract investors" and allocators, with multiple external factors from the situation in Ukraine, to inflation and rate rises having knock-on effects on the ILS market this year.  But these factors have also been one driver of recent catastrophe bond spread widening, on which Albertini said, "I hope it lasts for a while, because that is an embedded higher return for the investors."  Albertini went on to discuss the upcoming reinsurance renewals, the prospects for both cat bonds and collateralized reinsurance, as well as the need for ILS fund managers to focus on the sustainability of capital.

This new Artemis Live video saw us interviewing senior executives at insurance-linked securities (ILS) and reinsurance investment manager Aeolus Capital Management, to discuss their ongoing program of climate risk research and how that is playing into investment decision-making at the firm.  Aeolus' Chief Analytics Officer, Frank Fischer and Head of Research, Dr. Pete Dailey, joined us to explain how the program of climate risk research is playing an increasingly important role for the company.  Listeners may recall Pete and Frank joining me back in November 2021 (https://www.youtube.com/watch?v=52HLXMpZ1tY), for an interview in which we discussed the Aeolus view on climate risk and climate change.  Fast-forward around six months and Aeolus has continued to put extensive effort into its climate risk related research, with a new paper published recently about the influence of climate change on hurricanes.  So, in this interview we got an update on the Aeolus view of climate risk, how the research is going, how these efforts are influencing the firm’s ILS decision-making and some more in-depth thoughts on the role of research information and data on risk selection and ILS portfolio management.

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 Shevawn Barder, CEO of AM Re Syndicate, one of our Bronze sponsors for the conference.  AM Re is a reinsurance managing general agent (MGA) and writes a diversified book of business, while leveraging capital partners support.  With the ILS market increasingly keen to access differentiated sources of risk, AM Re is also looking to partner with new and alternative capital sources, so we thought it would be interesting to hear Shevawn’s take on the market opportunity right now.  "ILS investors clearly have an appetite for program business, ILS markets are moving into program business because this market is currently hard and expected to hold for 2022 and beyond," Barder explained.  Adding that, "For 2022 we're seeking to bring in new strategic ILS partners, investors to replace lost capacity in certain lines of business and we're also expecting to launch our E&S carrier, ASI, authorised out of Arizona."

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 speakers from LGT ILS Partners, one of our Associate sponsors for the conference. Joining us for this conversation were Christian Bruns and Michael Stahel, two Partners and Portfolio Managers from LGT ILS Partners. The pair discussed the state of the reinsurance and insurance-linked securities (ILS) market, explaining that they are seeing positive shifts. These positive shifts are coming as the industry absorbs and digests the impacts of multiple years of high catastrophe losses, which at recent reinsurance renewal rounds have enabled LGT ILS Partners to improve its portfolios of risk. Bruns and Stahel also discussed the benefits of LGT ILS Partners' having its own rated reinsurance balance-sheet and how that adds efficiency to how they face the market. Finally, we discussed two hot topics for the ILS investment community, climate change and ESG. 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. Event details can be found here: https://www.artemis.bm/ils-nyc-2022/