Bermuda Stock Exchange nears $16B of ILS & cat bond listings

by Artemis on January 5, 2015

The Bermuda Stock Exchange (BSX) has passed another impressive milestone, reaching a massive $15.912 billion of insurance or reinsurance-linked listings of catastrophe bonds, ILS, sidecars and reinsurance investment funds on the exchange.

The BSX continues to add to its insurance and reinsurance linked listings, benefiting from the continued growth of the insurance-linked securities (ILS) market and in particular the increasingly important role that catastrophe bonds and other collateralized reinsurance securities are playing in the global property catastrophe reinsurance market.

The growth of the BSX’s insurance-linked listings to nearly $16 billion reflects Bermuda’s attractive regulatory environment as a domicile for catastrophe bond and other insurance-linked securities (ILS) business. The BSX has capitalised on Bermuda’s dominant role in this position, with ILS increasingly a core component of the exchange’s success as a capital market and the exchange itself being one of the key drivers for choosing Bermuda as a domicile for ILS business.

Growth in the ILS and cat bond listings at the BSX has been impressive, to say the least. We first wrote about the BSX and its growing cat bond listings in July 2010 when it first reached the $1 billion ILS listings mark. We then tracked the BSX as it passed through $2 billion in September 2011, $3.5 billion in April 2012, more than $5 billion by December 2012, $7.2 billion by May 2013, over $9 billion by December 2013 and $10 billion by end of Q1 2014, before moving rapidly onto $12.4 billion by May 2014. and over $13 billion in September 2014.

Once again, strong quarterly catastrophe bond issuance towards the end of the year has benefited the BSX, helping it to add 56 new insurance linked listings during the year, and taking the total at the 31st December 2014 to $15.912 billion. This number will now decline with some maturities in the first-quarter of 2015, but the BSX is well-positioned to pick up its share of new catastrophe bond issuance as well, so we would expect the total to continue growing over the course of this year.

Commenting on the strong year’s activity in ILS and cat bonds, BSX President and Chief Executive Officer Greg Wojciechowski; “2014 ended strongly with a record number of ILS listings and variety of new listed structures which indicate that the BSX continues to develop its reputation globally as an internationally recognized stock exchange platform.”

“The accomplishments of the BSX to date and in particular this year’s results are directly attributable to the hard work of a dedicated team of world class stock exchange professionals that manage and operate the Exchange on a daily basis. The BSX team clearly understands the importance of a modern and solid domestic capital market and its contribution to the health of the Bermuda economy. The BSX team is committed to ensuring that Bermuda’s stock exchange platform remains the leader amongst its peers internationally while providing global capital market access and solid support for the continued development of Bermuda’s domestic capital market,” Wojciechowski continued.

Breaking down the BSX’s near $16 billion of insurance and reinsurance linked listings at the end of 2014 shows the dominance in the catastrophe bond space that the exchange enjoys. Catastrophe bond listings on the BSX reached $14.908 billion at the end of 2014, which against our number for the outstanding market of $25.029 billion is 60% of the outstanding market.

Another $576m is contributed by two insurance-linked funds, one each managed by Blue Capital and CATCo, which are both listed on the BSX.

The remaining $428m comes from a newly growing segment of the BSX’s listings, listed collateralized reinsurance sidecar notes. These are all from reinsurer Munich Re at the moment, after it increased its use of the Eden Re sidecar series for the January renewals.

The addition of sidecars is something which may become more prevalent, as investors begin to look for a more liquid answer to sidecar investing. The BSX is successfully growing its dominance as the leading choice of ILS domicile as well as expanding the type of ILS assets and vehicles which are listed on the exchange.

The growth year-on-year of ILS listed at the BSX is impressive, even in a very active market for catastrophe bonds and ILS. The number of insurance linked securities listed on the BSX increased to 118 from 77 (a 53% increase) while the amount of risk capital listed grew by 64% from $9.71 billion at the end of 2013 to the near $16 billion seen today.

“The BSX is pleased that our internationally recognized stock exchange platform has been of service and support to the global ILS asset class. As the intuitive location for the convergence of the capital market and the insurance industry, the Exchange is just one of several core infrastructural aspects that contribute to Bermuda emerging as the centre of excellence for the creation, listing and servicing of ILS structures,” Wojciechowski told Artemis.

Here is a useful list of all $15.912 billion of the insurance and reinsurance-linked listings on the Bermuda Stock Exchange, broken down into catastrophe bonds, reinsurance-linked investment funds and reinsurance sidecars. The most recent transactions are listed first, along with links to more details on each transaction where available.

You can read about every catastrophe bond and ILS deal in the Artemis Deal Directory.

Issuer Cedent Risks / Perils covered Size
LI Re (Series 2014-2) Unknown Property catastrophe risks $5m
Leine Re Unknown Property catastrophe risks $71m
Tramline Re II Ltd. (Series 2014-1) Amlin U.S. named storm, U.S. earthquake, European windstorm $200m
Nakama Re Ltd. (Series 2014-2) Zenkyoren Japan earthquake $375m
Tradewynd Re Ltd. (Series 2014-1) AIG U.S., Canada, Mexico, Caribbean, Gulf of Mexico, D.C. named storms. U.S., Canada, Mexico, Caribbean, D.C. earthquakes $500m
Ursa Re Ltd. (Series 2014-1) California Earthquake Authority California earthquake $400m
Kilimanjaro Re Ltd. (Series 2014-2) Everest Re U.S and Canada earthquake $500m
LI Re (Series 2014-1) Unknown Property catastrophe risks $10m
Golden State Re II Ltd. (Series 2014-1) California State Compensation Insurance Fund Workers compensation claims resulting from California earthquakes $250m
Hoplon II Insurance Ltd. MyLotto24 Lottery winning risk $66m
Dodeka III Unknown U.S. multi-peril $10m
Kane SAC Limited (Series 2014-2) Unknown U.S. hurricane $7.32m
Alamo Re Ltd. (Series 2014-1) Hannover Rück SE, on behalf of reinsured Texas Windstorm Insurance Association (TWIA) Texas named storms $400m
Aozora Re Ltd. (Series 2014-1) Sompo Japan and Nipponkoa Insurance Company Japan typhoon $100m
Nakama Re Ltd. (Series 2014-1) Zenkyoren Japan earthquake $300m
Sanders Re Ltd. (Series 2014-2) Allstate Florida named storms, earthquakes, severe thunderstorms $200m
Sanders Re Ltd. (Series 2014-1) Allstate U.S. named storms (excluding Florida), U.S. earthquake (CA, NY, WA) $750m
Armor Re Ltd. (Series 2014-1) American Coastal Insurance Company U.S. named storms (Florida only initially) $200m
Everglades Re Ltd. (Series 2014-1) Citizens Property Insurance Florida hurricanes $1,500m
Citrus Re Ltd. (Series 2014-2) Heritage Property and Casualty Insurance Co. U.S. earthquake (New Madrid region) $50m
Kilimanjaro Re Ltd. (Series 2014-1) Everest Reinsurance Company U.S. named storms, U.S. earthquakes $450m
Lion I Re Ltd. Assicurazioni Generali S.p.A. European windstorm $262m
Citrus Re Ltd. (Series 2014-1) Heritage Property and Casualty Insurance Co. U.S. named storms (Florida only initially) $150m
Merna Re V Ltd. State Farm U.S. earthquake (New Madrid region) $300m
Riverfront Re Ltd. Great American Insurance Group U.S. and Canada named storms, earthquakes, severe thunderstorms and winter storms $95m
Kizuna Re II Ltd. Tokio Marine & Nichido Fire Japan earthquake $245m
Gator Re Ltd. American Strategic Insurance Group U.S. named storms and severe thunderstorm $200m
Queen Street IX Re Ltd. Munich Re U.S. hurricane, Australia cyclone $100m
Omamori Tokio Millennium Re U.S. earthquakes and named storms (2nd event) $25m
Dodeka I Unknown U.S. multi peril $22m
Kane SAC Series 2014-1 Unknown Private catastrophe bond notes $50m
Windmill I Re Ltd. (Series 2013-1) Achmea Reinsurance Company N.V. Dutch windstorm $55m
Queen City Re Ltd. (Series 2013-1) American Modern Insurance Group, Inc. U.S. named storms $75m
VenTerra Re Ltd. (Series 2013-1) QBE Insurance Group Ltd. subsidiaries U.S. earthquake, Australia cyclone, Australia earthquake $250m
Loma Reinsurance (Bermuda) Ltd. (Series 2013-1) Argo Group Tropical cyclones, U.S earthquake, U.S. severe thunderstorm $172m
Tradewynd Re Ltd. (Series 2013-2) AIG U.S., Caribbean, Gulf of Mexico named storms. U.S., Canada earthquake $400m
Galileo Re Ltd. (Series 2013-1) Catlin U.S. named storms, U.S. earthquake, Canada earthquake, European windstorm $300m
Nakama Re Ltd. (Series 2013-1) Zenkyoren Japan earthquake $300m
Northshore Re Limited (Series 2013-1) AXIS Capital Holdings Ltd. subsidiaries U.S. hurricane, U.S. earthquake $200m
MetroCat Re Ltd. (Series 2013-1) First Mutual Transportation Assurance Co. Storm surge (named storm induced) $200m
Tradewynd Re Ltd. (Series 2013-1) AIG U.S., Caribbean, Gulf of Mexico named storms. U.S., D.C., Canada earthquake $125m
Mona Lisa Re Ltd. (Series 2013-2) Renaissance Re and DaVinci Re U.S. and Puerto Rico named storms. U.S. earthquakes $150m
Tramline Re II Ltd. (Series 2013-1) Amlin AG U.S earthquake, Canada earthquake $75m
Queen Street VIII Re Ltd. Munich Re U.S. hurricane, Australia cyclone $75m
Blue Danube II Ltd. (Series 2013-1) Allianz Argos 14 GmbH U.S., Caribbean, Central American, Mexican hurricane. U.S., Canadian earthquake $175m
Sanders Re Ltd. (Series 2013-1) Allstate U.S. hurricane, U.S. earthquake $350m
Bosphorus 1 Re Ltd. Turkish Catastrophe Insurance Pool Turkey earthquake $400m
Tar Heel Re Ltd. (Series 2013-1) North Carolina JUA / IUA North Carolina hurricane $500m
Merna Re IV Ltd. (Series 2013-1) State Farm U.S. earthquake (New Madrid region) $300m
Everglades Re Ltd. (Series 2013-1) Citizens Property Insurance Florida hurricanes $250m
Compass Re Ltd. (Series 2012-1) National Union Fire Insurance Co. of Pittsburgh U.S. hurricane, U.S. earthquake $400m
Lakeside Re III Ltd. Zurich American Insurance & Zurich Insurance Co. Ltd. U.S. and Canadian earthquake $270m
Queen Street VII Re Ltd. Munich Re U.S. hurricane, European windstorm $75m
Eurus III Ltd. Hannover Re European windstorm $130m
Embarcadero Re Ltd. (Series 2012-2) California Earthquake Authority California earthquake $300m
Queen Street VI Re Ltd. Munich Re U.S. hurricane, European windstorm $100m
Blue Danube Ltd. (Series 2012-1) Allianz Argos 14 GmbH U.S. hurricane, U.S. earthquake, Canada earthquake, Caribbean hurricane, Mexico hurricane $240m
Queen Street V Re Ltd. Munich Re U.S. hurricane, European windstorm $75m
Embarcadero Re Ltd. (Series 2012-1) California Earthquake Authority California earthquake $150m
Tramline Re Ltd. (Series 2011-1) Amlin AG U.S. hurricane, U.S. earthquake, European windstorm $150m
Golden State Re Ltd. (Series 2011-1) California State Compensation Insurance Fund Workers compensation claims resulting from California earthquakes $200m
Compass Re Ltd. (Series 2011-1) National Union Fire Insurance Co. of Pittsburgh U.S. hurricane, U.S. earthquake $575m
Queen Street IV Capital Ltd. Munich Re U.S hurricane, European windstorm $100m

Total catastrophe bonds and insurance-linked securities: $12.959 billion

Blue Capital Global Reinsurance Fund Limited $215m
CATCo Reinsurance Opportunities Fund – Ordinary Shares $361m

Total reinsurance-linked investment fund share classes (approximate): $531m

Eden Re I Ltd. Series 2015-1 Munich Re Collateralized reinsurance sidecar notes $75m
Eden Re II Ltd. Series 2015-1 Munich Re Collateralized reinsurance sidecar notes $290m
Eden Re Ltd. Series 2014-1 Munich Re Collateralized reinsurance sidecar notes $63m

Total reinsurance sidecar notes: $428m

Total insurance-linked listings on the BSX currently: $15.912 billion

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