Daily Insurance Industry News
Daily Insurance Industry News
Sunday 26th of May 2019
July 14, 2011

Cat bond issuance plummets

by Gill Montia

Story link: Cat bond issuance plummets

Unprecedented natural catastrophe losses in the first quarter of 2011 coupled with changes to US hurricane models contributed to only four new catastrophe bond issues, totalling $592 million, in the three months to the end of June.

According to Willis, the figure is down from $2.1 billion in the same period in 2010 when eight new deals were brought to market.

However, in its latest Insurance-Linked Securities (ILS) Market Update report, Willis notes that despite the loss activity and the low issuance, investors remain keen to invest in cat bonds.

Looking ahead, Willis Capital Markets & Advisory head of ILS, Bill Dubinsky, comments: “The cat bond market should see an uptick in deals in the second half of 2011 as investors get more certainty around how the new RMS hurricane model will affect pricing.”

Mr Dubinsky also warns that with 71% of outstanding cat bond limit exposed to US hurricane risk of some form, the market’s performance in the remainder of 2011 will rest on what happens during the current US wind season.


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