Insurance-linked securities issuance breaches $2bn
by Gill Montia
In its latest review of the insurance-linked securities (ILS) market, Aon Benfield reports that catastrophe bond issuance for the second quarter of 2012 reached $2.1 billion, compared with $1.5 billion of deals brought to market during the previous three months.
A total of seven transactions closed during Q2 2012, featuring both new and repeat sponsors, and issuance for the first six months of 2012 stood at $3.6 billion, just short of the all time high of $3.8 billion achieved during the same period of 2007.
According to Aon Benfield, the pipeline for the remainder of 2012 remains strong with the ILS sector likely to see healthy levels of capital inflows from both seasoned investors and newer entrants to the market.
Full year 2012 ILS issuance is expected to be in the region of $6 billion.
Earlier this month, Willis suggested that the catastrophe reinsurance market is on the cusp of a strategic shift, with third-party capital providers set to take on increasing amounts of peak catastrophe risk.
Over the medium term, the broker expects private unlisted vehicles and specialist independent catastrophe risk funds to take a larger share of the market in collateralised form.