Cat Bond Lite: Five Reasons to Learn More


This month, Tom Johansmeyer, AVP – reinsurance services, marketing at ISO/Verisk Insurance Solutions, talks about the growing interest in cat bond lite transactions.

johansmeyer-thomas-portrait.jpgLast year, $500 million in private catastrophe bonds reportedly came to market, and almost half of them were revealed to the public. In the first quarter of this year, close to $200 million in cat bond lite transactions were completed – and only two of them as renewals. The fast increase in adoption of the cat bond lite structure indicates that benefits of this approach are gaining a wide audience. Speed, flexibility, and tactical advantages make cat bond lite an important development for the insurance-linked securities (ILS) community.

Of course, a rapid rise doesn’t always mean further growth. Cat bond lite is still new, and the pace of innovation in the ILS community could provide additional refinements – or even something new – in the months and years to come. This is a development worth considerable attention, especially ahead of the June 1, 2015 reinsurance renewal.

With that in mind, let’s take a look at five important reasons to learn more about cat bond lite:

ILS, Verisk, Cat bond lite

Intelligent Insurer