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A combination of factors could make the insurance-linked securities market more competitive as 2017 goes on, according to Paul Schultz, CEO of Aon Securities.
According to Aon Securities’ ILS Year-End 2016 Update report, catastrophe bond issuance in the third and fourth quarters of 2016 was $2.8 billion, contributing to a calendar year total of $5.8 billion—a reduction compared to the 2015 calendar year, due to the competitive landscape within the re/insurance market.
This lighter primary issuance, coupled with a meaningful level of late 2016 and early 2017 catastrophe bond maturities, resulted in strong market demand towards the end of the year, with many Q3 and Q4 transactions upsizing to reach significant capacity.
“The current market environment suggests the prevalence of a competitive alternative reinsurance market in 2017, and potentially strong levels of primary issuance,” says Paul Schultz, CEO of Aon Securities.
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