Strategic shift for cat market, says Willis

The catastrophe reinsurance market is facing a strategic shift, according to a report by Willis Capital Markets & Advisory (WCMA), part of global insurance broker, Willis Group.

The report, Strong Momentum Continues into 2012 Hurricane Season, predicts a growth in the use of private unlisted vehicles, along with the growing specialist independent catastrophe risk funds, in the catastrophe risk market, in collateralised form.

Reports by WCMA and Aon Benfield Securities found that second quarter issuance was $2.1 billion, up significantly compared to the same period the year before.

“The current market outlook is very encouraging. Reduced risk spreads as a result of strong investor demand and available capital should stimulate increased issuance from sponsors in the future. In the absence of a significant catastrophe, we would expect the total for this year to be in the $5.5 to $6 billion range,” said Bill Dubinsky, head of ILS at WCMA.