Climate Change PLC has announced it’s full year figures for 2008. As the owners of the Insurance Futures Exchange (IFEX) they have numbers to share on how well the hurricane risk trading facility (housed at the Chicago Climate Futures Exchange) has performed in the first full year of windstorm futures trading.
They report that the year has been slow although not dissimilar to how other asset classes trade in their first years of existence. However, the volumes seem to have increased as the year progressed, December 2008 saw record volumes with 4,000 contracts exchanged in that month alone. The total traded volume for 2008 was 10,375 contracts, with open-interest at year end reacing 8,550 contracts with a value of $85m. It would be interesting to see if there is a correlation between the slow down of the catastrophe bond market and the increase in trades on the IFEX towards the latter part of the year, perhaps event-linked futures were being snapped up as an alternate form of capacity to both cat bonds and industry loss warranties?
The Insurance Futures Exchange (IFEX) has done a great job of creating a liquid, electronically traded marketplace for hurricane futures. If they want this growth to continue they really do need to make data more accessible, easy to visualise and easier to find; all successful electronic markets are fully transactable online these days and this is one area where the reinsurance and risk transfer industries fall behind.
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