$1.6 billion of new cat bonds issued in Q1
Some $1.6 billion of new issuance catastrophe bond transactions – made up of five bonds – took place in the first quarter, according to Willis Capital Markets & Advisory (WCMA), part of re/insurance broker Willis Group Holdings.
This compares with eight deals and a total of $1.3 billion in new non-life capacity in the first three months of last year, said WCMA in the Insurance Linked Securities (ILS) report.
The new capacity is coming from two sources: new inflows to existing ILS specialists coupled with the return of generalist investors, according to the report.
“After a slow start, 2013 is roaring forward with a flurry of cat bond, sidecar, and collateralised reinsurance activity,” said Bill Dubinsky, head of ILS at WCMA. “Collectively, capital markets insurance capacity significantly outsizes the surplus of the leading non-life reinsurers, excluding Berkshire Hathaway. Meanwhile, almost all major Bermuda reinsurers, except one, have third party capital initiatives in place. We may be witnessing the moment when the capital markets have moved from the sideshow to the main tent.”
WCMA expects the catastrophe bond pipeline to convert into a record issuance over the course of the rest of the year.
