Summary
No new natural catastrophe events took place over the last two weeks that would be expected to cause major insured industry losses.

Update on ongoing/occurred events
The Ebola pandemic in the Congo - where the initial outbreak was officially announced on 1 August 2018 by the Ministry of Health of the Democratic Republic of the Congo - has now spread to neighbouring Uganda. Therefore, the likelihood of the World Bank’s IBRD pandemic bond (CAR 111-112) being triggered has now increased substantially. It seems that the disease has now spread across borders which is one of the conditions that needs to be fulfilled in order to trigger a pay-out of the Cat Bond. Twelve Capital does not hold this bond in its pooled funds.

Other recent events
The following noteworthy natural events recently occurred during May and early June although, at present, these events are not expected to have a significant impact on Twelve Capital’s portfolios, or insured loss estimates have not yet been issued.

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. The expected insured loss estimate has now risen from USD 1 billion to about USD 2 billion (source: AON). This is not expected to have a significant direct impact on portfolios managed by Twelve Capital.

Severe weather/hail storm in Germany
There was a major storm in Germany due to severe convective weather early last week, with most of the damage incurred near the area of Munich. The insured losses estimated at the time of writing are between EUR 400m and 600m. This is not expected to have an impact on portfolios managed by Twelve Capital.

Monday, 17 June 2019

We are pleased to share with you a Clear Path Analysis report focusing on Insurance-Linked Securities (ILS) for institutional investors.

This is made up of a whitepaper by Dr. Jamie Rodney, ILS Analytics expert at Twelve Capital, and Dr. Thomas Loridan, CEO and Co-Founder of reask, a specialised research firm servicing the global reinsurance industry in the fields of catastrophe risk management, modelling and forecasting. They investigate the development of hurricane forecasting tools with the belief that advances in technology and computing power have the potential to enhance ILS investment management.

Meanwhile, a roundtable debate took place, featuring Twelve Capital portfolio managers Florian Steiger, Dr. Raffaele Dell’Amore and Etienne Schwartz, exploring a multi-asset approach to investing in the insurance sector. 

Please click here to download your copy of the excerpt.

Friday, 14 June 2019

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