July 16, 2020

Investor demand spurs catastrophe bond sales: analysis

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350px-Destruction_following_hurricane_andrewBill Kenealy Business Insurance

Strong investor demand will spur creation of catastrophe bonds and special-purpose vehicles throughout this year, SNL Financial L.C. said in a report.

Charlottesville, Va.-based SNL said nine new entities registered in Bermuda and the Cayman Islands during the first quarter of 2013.

Notable first-quarter deals this year included Caelus Re 2013 Ltd., which provides $270 million of capacity to sponsor Nationwide Mutual Insurance Co. for U.S. hurricane and earthquake exposures; and Tar Heel Re Ltd., a $500 million cat bond on behalf of the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association for hurricane risks.

“Even after an active 2012, the appetite for special-purpose insurance vehicles does not appear to be sated, judging by the slew of new formations thus far in 2013,” SNL said in the Thursday report. “The annualized first-quarter number would exceed the 2011 level, when 29 entities were registered between the two islands, but it would fall short of 2012, when more than 40 were registered.”

Separately, Newark, Calif.-based modeling firm Risk Management Solutions Inc. said Thursday that it conducted risk analysis on Tar Heel Re as well as Bosphorus Re 1 Ltd., a $400 million cat bond intended to cover earthquake risks in the Istanbul region.

“We are excited to see such strong investor demand for both of these transactions,” Peter Nakada, managing director of RMS capital markets said in a statement. “With a continuing interest and influx of investor capital into the insurance-linked securities market, now is a great time for cedents to lock in attractively priced cover for the next few years.”

For more on this story go to:

http://www.businessinsurance.com/article/20130502/NEWS04/130509955?tags=|60|306|64|340|302#

See related story below

SNL Report: Cat Bond market continues to progress

By Thomas Mason Insurance Journal

A report from SNL Financial cites the recent activity in the insurance linked securities (ILS), or “Cat Bond” market is continuing to be an attractive alternative for insurers.

SNL’s report notes that “even after an active 2012, the appetite for special purpose insurance vehicles does not appear to be sated, judging by the slew of new formations thus far in 2013. Bermuda registered eight special purpose insurers in the first quarter of 2013, and the Cayman Islands licensed one class C entity, based on data from the monetary authorities of both domiciles.

“All told, more than $1 billion flowed to special purpose vehicles in the first quarter, which is a conservative estimate; data on the amount of capital backing Accordion Reinsurance II Ltd., Mona Lisa Re Ltd. and Collateralized Re (L) Ltd. was not immediately available.

“In terms of the number of vehicles registered, the annualized first-quarter number would exceed the 2011 level, when 29 entities were registered between the two islands, but it would fall short of 2012, when more than 40 were registered.”

Source: SNL Financial

For more on this story go to:

http://www.insurancejournal.com/news/international/2013/05/03/290815.htm

 

 

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