Twelve Capital is once again issuing regular event updates as the first half of the 2019 US Atlantic Hurricane Season officially commences. In fact, on 21 May, storm Andrea actually became the first named storm in the Atlantic this year although it did not make landfall.

These updates will be issued on a fortnightly basis. As always, Twelve Capital continues to closely monitor any catastrophe events and will issue specific updates on any relevant new major events which occur.

Overview of current forecasts
Current forecasts for the North Atlantic Basin of the actual number of named storms and hurricanes that might occur range from 12 to 14.5 named storms and from 5 to 7 hurricanes. On a long-term basis, this would be a slightly above average season, given that the average number of storms observed between 1950 and 2018 is 11 named storms and 6 actual hurricanes.

Other events
At the time of writing, the following noteworthy natural events have recently occurred although at present, these events are either not expected to have a significant impact on Twelve Capital’s portfolios or industry insured losses have not yet been estimated for them.

Peru earthquake
On 27 May, an earthquake with a magnitude of 8.0 occurred at a depth of 110km in Peru (Source: USGS). Initial information reported indicates that the earthquake resulted in structural damage to buildings and infrastructure as well as some loss of life. The earthquake’s epicentre is located in a sparsely-populated area of the country away from the larger cities. At this point, Twelve Capital expects relatively little impact on its Cat Bond and Private ILS strategies.

Severe convective storms in the US
During May, a series of US convective storms across the Midwest, Central Plains and Northeast led to a number of tornadoes and flooding. Currently, the insured losses are expected to be about USD 1 billion (source: AON), however, these are not expected to have an impact on portfolios managed by Twelve Capital.

Monday, 03 June 2019

Yesterday, an intense earthquake with a magnitude of 8.0 occurring at a depth of 110km struck Peru (Source: USGS). Initial information reported indicate that the earthquake resulted in structural damage to buildings and infrastructure, and has killed at least one person whilst injuring many more.

Fortunately, the earthquake’s epicentre is located in a sparely populated area of the country away from the larger cities, which has mitigated the overall economic impact. However, shakes could still be felt hundreds of miles away.

At this point, Twelve Capital expects only little impact on its Cat Bond and Private ILS strategies. The only Cat Bond potentially exposed to this event is an IBRD-sponsored Cat Bond, which Twelve Capital estimates to lose 30% of notional from this event. Most portfolios at Twelve Capital have little or no exposure to this particular bond, so that the overall impact on investor performance is expected to be minimal at this point.

Twelve Capital continues to monitor the situation, and will give further updates should the situation change materially. 

Monday, 27 May 2019

We are pleased to share the latest Twelve Capital Research Spotlight with you, which focuses on the opportunity in Cat Bonds after the repricing. Please click here to download your copy.

Monday, 13 May 2019