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Catastrophe bond issuance reaches record Q1 level: Aon Benfield Securities


April 15, 2015   by Canadian Underwriter


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Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, said in a report released on Wednesday that catastrophe bond issuance for Q1 reached a record of $US1.7 billion, higher than any other Q1 issuance in the history of the insurance-linked securities (ILS) sector.

The report, Insurance-Linked Securities First Quarter 2015 Update, revealed that Q1 comprised seven property cat bonds and one health transaction and brought, as of March 31, bringing total cat bonds on-risk to $US22.1billion, a slight decrease on the record $US24.3 billion seen at year-end 2014, as $US3.9 billion of bonds came off-risk during the first quarter period.

Total cumulative issuance for property cat bonds since the market’s inception had surpassed the $US60 billion mark by the end of the first quarter. [click image below to enlarge]

Several records were set in the ILS market during 2014, and the trend continues in 2015

Related: Two catastrophe bonds issued in Q1 2015 cover Canada and U.S.

“Several records were set in the ILS market during 2014, and 2015 has continued in the same vein, with a record first quarter issuance total, and a consistently high level of transactions on-risk,” said Paul Schultz, chief executive officer of Aon Benfield Securities, in a press release.

“There remains strong interest in the market from sponsors, and from investors who, despite having accepted decreased interest spreads, continue to allocate high volumes of capital to primary issuances,” he said. “The ongoing success of the sector is partly being driven by the structuring of innovative transactions, for which we continue to see new perils, territories, and structural features being added to address individual risk requirements.”

Seven cat bonds were issued in the first three months of 2015, and two of those provide coverage in Canada, Verisk Analytics Inc.’s Property Claims Services (PCS) unit said in a report last week.


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