Cat bond lite - and an ideally short shelf life

A couple of years ago, private catastrophe bonds were exactly what the name indicates: private. In 2014, however, the rapid growth of the ‘cat bond lite’ market brought such transactions into the public eye, especially as the global reinsurance and insurance-linked securities (ILS) market began to see the bond’s utility in tactical risk and capital management. And growth continued. Rapidly. Last year, publicly revealed cat bond lite transactions doubled year on year. Although the fourth quarter ended without any issuance activity, the market had plenty of chatter to suggest continued momentum into 2016.