Cat bond & ILS listings on Bermuda BSX pass $19.2bn at end of 2015

by Artemis on January 7, 2016

The Bermuda Stock Exchange (BSX) continues to grow the volume of insurance-linked listings of catastrophe bonds, insurance-linked securities (ILS) and insurance linked investment funds on the exchange, surpassing the $19 billion mark for the first time.

Bermuda Stock ExchangeThis time last year Artemis wrote how the number of cat bond and ILS listings on the BSX reached $15.912 billion from an impressive 118 listings, by the end of 2014. And now, the exchange has reported that one year later, at the end of 2015 those numbers had increased to $19.209 billion from 151 listings.

“The continued growth in ILS listings is testament to the platform that we have put in place in Bermuda and the robust listing process we have at the BSX,” said Greg Wojciechowski, President and Chief Executive Officer (CEO) at the BSX.

The exchange recently published its end of year review, which highlights the record number of ILS listings witnessed throughout 2015, and the development of small and medium-sized enterprise firms.

The consistent growth of listings on the BSX underlines Bermuda’s stance as a leading domicile for ILS and catastrophe bond business, something that has benefited from the islands appealing regulatory landscape.

With other insurance and reinsurance hubs, such as London, voicing the want of a deeper relationship and greater involvement with the ILS space, evidenced by the work being undertaken by the London Market Group (LMG) and HM Treasury, the BSX will welcome the continued flow of new listings.

“ILS remains a fascinating asset class with high growth potential. The BSX is delighted to be able to provide the global financial market and asset class with a home in Bermuda and we look forward to continuing to help the ILS sector grow,” said Wojciechowski.

Back in July 2010 the BSX insurance-linked listings surpassed $1 billion for the first time, and had grown to more than $9 billion by December of 2013. Now, in roughly two years, that figure has reached an impressive $19.209 billion, underlining the ILS market’s contentment with Bermuda as a hub for ILS business.

In total 218 new securities were listed on the BSX during 2015, explains the exchange, with a record 58 insurance-linked securities transactions, amounting to more than $6 billion.

“As at 31 December, 2015 there was a total of 681 securities listed on the BSX,” notes BSX Chief Compliance Officer, James McKirdy. Which the BSX says amounts to more than $349 billion.

Catastrophe bond and ILS securities alone account for $18.099 billion of the total BSX insurance-linked listings. That accounts for almost exactly 70% of the outstanding cat bond and ILS securities market, further cementing the value the BSX holds for the ILS market, and vice-versa.

Emphasising this point, Wojciechowski noted; “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.”

The rest of the ILS listings on the BSX comprise reinsurance-linked investment fund share classes, operated by two leading ILS and reinsurance asset managers Blue Capital Management and CATCo Investment Management, as well as a number of sidecar note series all sponsored by Munich Re.

And with other financial centres around the world beginning to look at ILS as a more viable, and sophisticated asset class, Bermuda and the BSX will be hopeful of maintaining its leading position as a domicile for the ILS and cat bond space.

“I have every confidence that the hard work undertaken at the BSX and in Bermuda to create and sustain a reputable and respected commercial and regulatory environment will continue to drive the Exchange’s commercial development and assist us in adding new lines of business and further elevate Bermuda’s position amongst the major global financial centres,” said Wojciechowski.

Full details of all of the catastrophe bond and ILS securities listings on the BSX can be found in the Artemis Deal Directory.

The BSX insurance-linked listings break down as follows.

Catastrophe bonds and ILS securities: $18.099 billion

Reinsurance-linked investment fund share classes (the CATCo Reinsurance Opportunities Fund and the Blue Capital Global Reinsurance Fund Limited): $669m

Reinsurance sidecar notes (all from Eden Re vehicles sponsored by reinsurer Munich Re): $441m

Total insurance-linked listings on the BSX currently: $19.209 billion

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