ILS

Bermudian short-tail specialist Lancashire Holdings has unveiled a $200mn credit facility with UK banking group Lloyds TSB.

In a move that will bring the total risk placed into the capital markets in 2010 to $850mn, North Carolina's state-backed catastrophe insurance plans - the Joint Underwriting Association and the North Carolina Insurance Underwriting Association, (NCJUA/IUA) - are to bring a $200mn wind catastrophe bond to market.

Losses in the first quarter of 2010 could drive more (re)insurers to look for capacity in the capital markets, according to Guy Carpenter.

A $100mn issuance is understood to be on the way from US insurer Assurant, which will provide cover for the company's US wind exposure.

In a novel move, Catlin Group is to form a sidecar-style, perpetual class 3 Bermudian reinsurer that will write a portion of the group's catastrophe risk portfolio and list it on the London Stock Exchange's junior platform, AIM.

In what is traditionally a busy quarter for industry loss warranties (ILWs) between $3bn and $3.5bn of contracts were traded in the first three months of 2010, The Insurance Insider's sister publication Trading Risk revealed last week.

US insurers Liberty Mutual and USAA will issue catastrophe bonds in Q2, sister publication Trading Risk predicted last week.

US insurer State Farm Fire & Casualty closed its Merna Re II cat bond on 1 April, affording $350mn of indemnity-based US earthquake cover.

Three new US-peril cat bonds are expected to come to market in the next week, kick-starting ILS issuance ahead of the start of the US wind season in June.Reinsurance broker Aon Benfield is believed to be managing Mystic Re 2010 on behalf of US insurer Liberty Mutual. The bond is expected to come to market in mid-April and will offer multi-year cover against US wind and quake exposures, according to sources.

Munich Re stands to be the latest (re)insurer to offer longevity risk transfer capacity, broadening the capital base for insurers and pension funds seeking to hedge their pension portfolios.The world's largest reinsurer is understood to be considering offering capacity for tailor-made solutions, to longevity exposures, according to reports

The higher prices charged for capital markets' capacity are justified in the current climate, according to Chubb chief risk officer (CRO) Joel Aronchick.

Pricing is falling for capital markets' capacity which is encouraging further issuance. We take a look at what is in the pipeline...