ILS listings on Bermuda BSX reach record high of $21.2bn

by Artemis on January 11, 2017

The volume of insurance-linked listings of catastrophe bonds, insurance-linked securities (ILS), reinsurance sidecar notes and insurance linked investment funds on the Bermuda Stock Exchange (BSX) reached a new high at the end of 2016, exceeding $20 billion for the first time.

Bermuda Stock ExchangeA record 61 new ILS listings listed on the BSX during 2016 with a combined capitalisation of $6.157 billion, which took the total number of ILS listings on the exchange to 175, growth of 16%, reports the BSX.

In total, says the BSX, the 175 ILS listings on the exchange at year-end 2016 had a value of $21.22 billion, up 10% from the $19.21 billion reported a year earlier, making it a new record for ILS listings on the exchange.

James McKirdy, BSX Chief Compliance Officer (CCO), explained that of the 61 ILS listings witnessed throughout 2016, there were seven Variable Rate Note Programmes and 19 new Notes under established programmes.

“2016 saw positive listing activity across most sectors including international equities, debt, collective investment vehicles and ILS,” said McKirdy, adding that as at December 31st 2016 the total number of listed securities on the BSX amounted to 753.

President and Chief Executive Officer (CEO) of the BSX, Greg Wojciechowski, said; “2016 was a very positive year for the BSX, commercially and organizationally, with some very significant milestones achieved.

“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, how the BSX platform is central to this and how all the pieces collectively contribute to the health and development of Bermuda’s economy,” continued Wojciechowski.

Artemis has tracked the growth of the volume of ILS and reinsurance linked listings on the BSX for some time, and wrote in July 2010 that the value of ILS listings on the exchange exceeded $1 billion for the first time.

This reached more than $9 billion by December 2013, before increasing to $19.2 billion in 2015, and then the $21.22 billion reported today.

In the 12-month period ending December 31st 2016 the value of ILS listings on the BSX increased by roughly 10%, after growing by more than 109% from the end of 2013 to the end of 2015.

“The BSX is not just home to ILS vehicles domiciled in Bermuda, but also to entities incorporated in other jurisdictions. We seek to work collaboratively with financial markets around the world, to provide them the benefits of our experience in listing ILS structures.

“We intend to work closely with other jurisdictions, technology providers, the insurance and reinsurance industry, ILS funds, and capital market investors to ensure that the support they receive from the BSX is meeting their ILS listing needs,” explained Wojciechowski.

The Artemis Q4 Catastrophe Bond & ILS Market Report shows that issuance in 2016 surpassed $7 billion for the fourth consecutive year, helping the outstanding market end the year at its largest ever size, of $26.82 billion.

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

Despite a notable slowdown from more recent years, the entry of ILS capital into the global reinsurance marketplace continued to expand in 2016, with market capitalisation at a reported $75 billion to $80 billion at year-end 2016.

The ILS asset class continues to grow in acceptance and expand its influence across the global insurance and reinsurance industry, and Bermuda continues to attract new vehicles and capacity to its shores.

With other financial centres across the globe starting to realise the potential of ILS as a viable, sophisticated and beneficial asset class, Bermuda and the BSX will be looking to maintain its leading position as a global hub for ILS business.

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