Global Insurance And The Capital Markets

Publication Date	April 2008
Publisher	IFR Market Intelligence
Product Type	Report
Pages	110
ISBN Number	not applicable
Product Code	IFR00018

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Summary

"... as this study rightly makes clear, there are important innovations underway in the no-man's land between insurance and capital markets...a fascinating mixture of competition and collaboration between these two increasingly closely linked sectors is set to unfold - provided both sides inform themselves about the marketplaces concerned - to which this study is a most valuable introduction." Extracted from the report's foreword by:

Sir Adam Ridley, chairman, Equitas Trustees; former director general, London Investment Banking Association (LIBA); former adviser to the UK Chancellor of the Exchequer

As insurers look increasingly to capital markets to hedge risk rather than more traditional reinsurance markets, investment banks have a fantastic and potentially immensely lucrative opportunity to win new business.
Of approximately US$60trn of assets under management globally, around US$17trn are invested in insurance funds. The strategies adopted by insurers to maximise their returns and meet their liabilities has a crucial influence on equity and bond markets, as well as options, credit derivatives and other financial instruments. Yet for all the immense wealth and influence of insurers, little has been published exploring the relationship between them and the investment banks that service them.

Global Insurance and the Capital Markets examines the relationship between the banking and insurance sectors, focusing on innovative ways in which the former can offer tailored services to the latter, thereby generating significant new income streams.

This unique report:

quantifies insurers' and reinsurers' involvement in the capital markets as both borrower and investor
highlights the main drivers acting on the insurance markets and assesses the implications for the capital markets
examines the relationship between insurers, reinsurers and the capital markets and how it is evolving
identifies which instruments have been favoured by (re)insurers both as debt issuance and investment and why

pinpoints opportunities for banks to meet the changing needs of the insurance sector, and for (re)insurers to access lower cost risk management through innovation in capital market solutions.
emphasises the low correlation insurance linked securities enjoy with subprime collateralised debt instruments.

Content

Chapter
- The Worlds Insurance Markets And The Leading Players
- Global Size Of The Insurance And Reinsurance Markets
  - Product Demand
- Global Performance Of The Insurance Sector
- The Life Insurance Market
  - Pensions
  - Profitability
- The Property And Casualty Market
- New Growth Markets
  - Growth Hotspots
- The Worlds Leading Insurance And Reinsurance Companies Key Facts, Strategy And Financial Performance
- The Major Insurance Companies
- Insurance Broking Companies
- Investment Holdings By The Uk Insurance Industry
Chapter
- The Reinsurance Industry
- What Is Reinsurance?
- Reinsurance In Practice
- The Evolution Of The Global Reinsurance Market
- Future Opportunities And Challenges Faced By The Reinsurance Industry
Chapter
- The Main Drivers Acting On The Insurance And Reinsurance Sectors
- The Evolution Of The Insurance-Linked Securitisation Market As A Means Of Tapping International
- Capital
- Key Drivers Behind The Rise Of The Ils Market
- Regulatory Requirements Surrounding Capital Adequacy
- Greater Shareholder Activism
- Opportunities To Monetise Embedded Value
- Hedging Specific Risks
- Securitisation As A Means Of Addressing Excess Mortality Risks
- Ils A Rapidly Growing Marketplace
  - Development Of The Market
  - Growth In Securitisation
  - Securitising Property & Casualty Risks
  - Cat Bonds
  - Why Invest In Cat Bonds?
- The Sharpe Ratio
  - Cat Swaps
  - Industry Loss Warranties
  - Who Buys Ilws?
- Contingent Capital
- Sidecars
  - The Attraction Of Sidecars To Sponsors And Investors
  - Regulation Of The Industry In The Us
  - The Influence Of Hedge Funds On Sidecars
- The Growth In The Ils Market Implications And Repercussions For International Capital Markets
- Securitisation Key Points
Chapter
- Regulation Of The Insurance And Reinsurance Setors Worldwide
- Introduction
- The Group Of Thirty (G30) Report
  - G30 Recommendations And Subsequent Initiatives
- Regulation Of The Insurance Industry In The Us
  - Regulatory Reform In The Us
  - Recent Developments
- Regulation Of The Insurance Industry Within The Eu
  - Solvency Ll
  - New Uk Requirements
  - Industry Prospects
  - The Reinsurance Directive
  - Implications Of Implementation
  - Reform Issues
  - Structural Guidelines
  - The Insurance Mediation Directive
- Regulation Of The Insurance Industry In Switzerland
- Regulation Of The Insurance Industry In Bermuda
  - Regulatory Advantages
  - Relocation Boom
- Key Implications Surrounding The Changing Face Of Regulation
Chapter
- The Relationship Between Banks And Insurance Companies
- Introduction
- Latest Developments In The Ils Market
- Securitised Insurance Risks
  - Types And Volume Of Securitisation
  - The Emergence Of Cdos
  - Impact Of The Credit Crunch And Sub-Prime Crisis In 2007
  - Climate Change And Its Impact On The Ils Market
  - New Trading Opportunities For Ils
  - Prospects For Ils
- The Credit Transfer Markets
- M&A In The (Re)Insurance Sector
  - Investment From West To East And East To West
  - Interest From Bermuda
  - M&A In Insurance Broking
- Monoline Bond Insurance A Market In Turmoil
  - Background
- Ratings Pressure
  - The Impact Of Monolines Plummeting Credit Ratings On The Banking Sector
  - Rescue Plan And Opportunities To Profit
Chapter
- Investment Strategies Adopted By (Re)Insurers
- Introduction
  - Product Options
- Investment Objectives
- The Insurance Sectors Role In The Fund Management Industry
- Recent Trends
  - Fund Management In The Uk
  - The Switch To More Sophisticated Structured Instruments
  - An Appetite For Innovation
- Five Case Studies
  - Aviva
  - Legal & General
  - Pearl
  - Standard Life
  - Swiss Re
Tables & Figures
- T1.1: Largest National Insurance Markets, 1996, 2006 (Us$Bn, %)
- T1.2: Changes In Uk Pension Arrangements, 200207 (%)
- T1.3: The Worlds Largest Life Insurance Companies, 2007 (Us$Bn)
- T1.4: The Worlds Largest P&C Insurance Companies, 2007 (Us$Bn)
- T1.5: Europes Top 10 Insurance Companies Financial Performance, 200106 (m, %)
- T1.6: Leading European Insurance Companies, 2007
- T1.7: The Worlds Largest Insurance Brokers And Risk Management Consultants, 2007 (Us$M)
- T2.1: Top 40 Global Reinsurer Groups, 2005, 2006 (Us$M, %)
- T3.1: Characteristics Of P&C Securitisation
- T3.2: Reinsurers Krw Losses As A % Of Shareholders Equity
- T3.3: Lead Managers Advising On Cat Bonds, H1 2007 (Us$M)
- T3.4: The 12 Largest Sidecars Established In Bermuda Following Hurricane Katrina
- T4.1: Membership Of The G30 Study On Reinsurance & International Financial Markets
- T5.1: Lead Managers Advising On Cat Bonds, H1 2007 (Us$M)
- T5.2: Non-Life Risk Securitisations, 2007
- T5.3: Types Of Derivative Transactions Entered Into By Reinsurance Entities Reporting To The Iais (Us$M)
- T5.4: Reinsurance Companies Participation In Cds And Cdos, 200506 (Us$M)
- T5.5: Cds Held By The Worldwide Insurance Sector, End-June 2006 (Us$, %)
- T6.1: Insurance Company Investments Per Category, By Country, 2005 (m)
- T6.2: Total Investments Of Insurance Companies, By Country, 200506 (m, %)
- T6.3: Life Investments Of Insurance Companies, By Country, 200506 (m, %)
- T6.4: Non-Life Investments Of Insurance Companies, By Country, 200506 (m, %)
- T6.5: Uk Long-Term Insurance Companies Worldwide Net Premium Income, 2006 (m)
- T6.6: Aggregate Numbers And Ownership Of Insurance Companies Authorised In The Uk
- T6.7: Top 20 European Insurance Groups Investments, 200405 (000, %)
- F1.1: Life And Non-Life Insurance Real Premium Growth, 19802006 (%)
- F1.2: Insurance Density And Penetration, By Country, 2006 (Us$, %)
- F1.3: Insurance Companies Equity Holdings And Performance, 19902006
- F1.4: Insurance Companies Invested Assets Under Management, 2006 (Us$Bn)
- F1.5: Invested Funds By Asset Class, 2006
- F1.6: Insurers Investments By Category, 2005 (%)
- F3.1: Ils Business Models
- F3.2: Ils Issuance, 1999h12007 (Us$M)
- F3.3: Ils Projected Growth, 19972016 (Us$M)
- F3.4: Sidecar Structure
- F5.1: Natural Catastrophes, Economic Losses And Insured Losses, 19502006 (Us$Bn)
- F5.2: Cds Amounts Outstanding, H2 2004 H2 2006 (Us$Trn)
- F6.1: Insurance Companies Invested Assets Under Management, 2006 (Us$Bn)
- F6.2: Insurance Company Investments Per Category, 1999, 2005 (%)
- F6.3: Share Of Life And Non-Life Investments, By Country, 2006 (%)
- F6.4: Insurance Company Investments Across The Eu25, 19992005 (m)
- F6.5: Uk Insurance Industry Investment Funds, 19972006 (bn)
Please Note: These Contents Were Correct At Time Of Going To Print, But May Be Subject To Change