Catastrophe bond capacity is maturing, and not much of it is coming back. In the first quarter, $1.8 billion in cat bond risk capital matured, and only $508 million returned in the form of new issuances, according to Thomson Reuters. This quarter, $2.77 billion is maturing, and the absence of first-time issuers makes it unlikely that the market will replace it all. More than a billion of it was from State Farm's Merna Re transaction. The successor to it has already been issued, cleverly named Merna Re II, at only a fraction of the previous bond.

Continue reading Catastrophe Bond Issuance Gap Is upon Us

Catastrophe Bond Issuance Gap Is upon Us originally appeared on BloggingStocks on Mon, 12 Apr 2010 17:00:00 EST. Please see our terms for use of feeds.

Mexican Earthquake Won't Move Reinsurance Market originally appeared on BloggingStocks on Wed, 07 Apr 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Catastrophe Bonds: Same but Different in 2010

Catastrophe Bonds: Same but Different in 2010 originally appeared on BloggingStocks on Mon, 29 Mar 2010 12:00:00 EST. Please see our terms for use of feeds.

Merna Re, the largest catastrophe bond of all time, is set to mature in June, and State Farm is already putting together its replacement, the creatively named Merna Re II. The successor, planned for issuance in April, is said to be for $400 million in risk capital, though investor demand could push it as high as $700 million. This still pales in comparison to the $1.2 billion that the original brought in the door.

If State Farm is able to stimulate demand for Merna Re II, which would protect the company from non-California earthquake risk in the U.S., it will be third cat bond to come to market in 2010, which is expected to be a strong year for this form of risk transfer. The cat bond market fell silent after the near-collapse of American International Group (AIG) in September 2008 but was still the third busiest in terms of capital issued in the history of the cat bond market. Heading into 2009, prospects for the cat bond space seemed uncertain, but a robust fourth quarter eventually resulted in a year-over-year increase, driven mostly by repeat issuers.

Continue reading State Farm Planning Monster Cat Bond

State Farm Planning Monster Cat Bond originally appeared on BloggingStocks on Fri, 19 Mar 2010 10:10:00 EST. Please see our terms for use of feeds.

Catastrophe modelers, insurers and reinsurers are still sorting out the damage from Windstorm Xynthia in Europe and the earthquake in Chile. Taking only the highest of high-end estimates, the damage from these two catastrophes could exceed $12 billion, resulting in fairly steep property-catastrophe losses long before hurricane season begins. With three more major property reinsurance renewals remaining for the year -- at April 1, June 1 (Florida) and July 1 -- there is plenty of time for the impact of these events to be absorbed into reinsurance pricing.

Continue reading Assessing the Tab for Q1 Catastrophes

Assessing the Tab for Q1 Catastrophes originally appeared on BloggingStocks on Mon, 15 Mar 2010 17:00:00 EST. Please see our terms for use of feeds.

Continue reading Pensions Consider Insurance Securitization Finance Because You Refuse to Die

Pensions Consider Insurance Securitization Finance Because You Refuse to Die originally appeared on BloggingStocks on Mon, 15 Feb 2010 14:40:00 EST. Please see our terms for use of feeds.

Nine catastrophe bonds have matured so far in the first quarter of 2010, removing $1.8 billion in risk-transfer capacity, according to data from Reuters. The insurance industry has compensated with $508 million in new cat bond risk capital, with the busy fourth quarter helping to absorb what is maturing now. Only one cat bond has closed so far this year, The Hartford's (HIG) $180 million Foundation Re III. But, the first quarter is usually a quiet one for the cat bond market.

It partly replaces the $105 million in protection that Foundation Re D afforded. Swiss Re (SWCEY) and SCOR (SCRYY) are also among the insurance companies with bonds maturing that have at least partial coverage from new cat bond issuances. Another four bonds have matured, however, with no new related issuance, affecting Munich Re (MURGY), AXA (AXA) and others.

Continue reading Cat Bond Market Shift Favors Goldman Sachs

Cat Bond Market Shift Favors Goldman Sachs originally appeared on BloggingStocks on Mon, 15 Feb 2010 12:20:00 EST. Please see our terms for use of feeds.

The end of a year means a rush of data from the insurance and reinsurance industries, as treaties are renewed for the coming year. Catastrophe bonds are a part of this annual orgy of data production, as a flurry of activity occurs in December, with the industry's commitment to this form of alternative property-catastrophe risk-transfer setting the tone for the year to come. The cat bond market isn't big enough to push reinsurance rates, but you can generally get a sense of what the coming year will look like for cat bonds based on pricing for traditional reinsurance.

Continue reading Catastrophe Bond Market Hits Target, Records Possible in 2010

Catastrophe Bond Market Hits Target, Records Possible in 2010 originally appeared on BloggingStocks on Mon, 04 Jan 2010 17:45:00 EST. Please see our terms for use of feeds.

The catastrophe bond market is still running strong. This alternative to reinsurance, in which insurers can package up their risk and sell it to investors, may be a small part of the market, but carriers are clearly committing to it.

Swiss Re (SWCEY) and Scor (SCRYY) both have launched cat bonds, for $150 million and $75 million, respectively. This brings the fourth quarter issuance total to $840 million and the 2009 year-to-date tally to just over $2.6 billion, based on information from Artemis.bm and Guy Carpenter's GC Capital Ideas.

Continue reading Trading on disaster: Two new cat bonds come to market

Trading on disaster: Two new cat bonds come to market originally appeared on BloggingStocks on Thu, 03 Dec 2009 13:00:00 EST. Please see our terms for use of feeds.

Analyst upgrades:

• Jefferies upgraded Aruba Networks (NASDAQ: ARUN) to Buy from Hold following the company's Q3 results to reflect improved visibility. The firm raised its target price to $6.50 from $3.
• Citigroup upgraded Mosaic (NYSE: MOS) and Potash (NYSE: POT) to Buy from Hold and Agrium (NYSE: AGU) to Hold from Sell as it believes stronger grain fundamentals more than offset China contract risk. The firm raised its target on Mosaic to $72 from $48, on Potash to $145 from $83 and on Agrium to $55 from $36.
• Fulton Financial (NASDAQ: FULT) Was upgraded to Market Perform from Underperform at Keefe Bruyette.
• Rio Tinto (NYSE: RTP) was raised to Neutral from Sell at Goldman.
• Noble Corp. (NYSE: NE) was upgraded at Deutsche Bank to Buy from Hold.

Continue reading Analyst upgrades, downgrades and initiations: ARUN, MOS, POT, AGU, EGLE, DO, MON, SWCEY, TDC and ABC

Analyst upgrades, downgrades and initiations: ARUN, MOS, POT, AGU, EGLE, DO, MON, SWCEY, TDC and ABC originally appeared on BloggingStocks on Fri, 22 May 2009 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Swiss Reinsurance quarterly profit plunges 87% on deep write-downs

Swiss Reinsurance quarterly profit plunges 87% on deep write-downs originally appeared on BloggingStocks on Fri, 29 Feb 2008 13:21:00 EST. Please see our terms for use of feeds.