The Bermuda Stock Exchange (BSX) have issued a press release announcing that they now play host to over $2 billion worth of insurance-linked securities and catastrophe bonds. The value of ILS listed on the BSX has doubled since July 2010 and this is the first time that the value of ILS listed on the island has cleared the $2 billion mark.
Bermuda have been playing catch-up as a domicile for ILS transactions since the Cayman Islands took over as domicile of choice. Still, today the majority of outstanding catastrophe bonds are domiciled in the Cayman’s, but Bermuda has been striving to catch up since they implemented new legislation to make listing of ILS and cat bonds a more streamlined process.
“We are delighted to have been able to surpass the $2 billion mark in such a relatively short space of time,” said Greg Wojciechowski, President and Chief Executive Officer of the Bermuda Stock Exchange. “It has been a strategic goal of the BSX to make Bermuda the jurisdiction of choice for listing cat bonds and other ILS. The sponsors are here, the special purpose insurers are also on the island, and, of course, we also have the Exchange, so Bermuda is the perfect location to form and list cat bonds.”
The recently completed Embarcadero Re Ltd. catastrophe bond, which provides the California Earthquake Authority with $150m of earthquake reinsurance, took the number of listed securities linked to insurance to 17 on the BSX (the BSX’s figures include two classes of CatCo shares) and the value to $2.1 billion.
Bermuda has also recently seen a surge in insurance company registrations including special purpose insurers.
Mr Wojciechowski said; “Bermuda is the world’s third largest reinsurance market and is already home to 1061 companies with $496 billion in assets. Because of this, Bermuda is a natural place for setting up and listing cat bonds. Many of our reinsurance companies have issued cat bonds or set up special purpose vehicles such as side cars – so we have a historical interest and knowledge.”
And demonstrating their commitment to the market, he added; “We see the market in ILS as being truly international and we are encouraged that the Exchange is seeing listing interest from all over the world. We are absolutely delighted with the success of Bermuda in attracting ILS and the BSX’s ability to list these bonds. There had been serious interest in ILS since 2010 and this has continued into this year. We sense that there is an increased understanding and appreciation in the industry of Bermuda’s commitment to support the future growth of this market and the BSX if firmly focused on providing capital market support to this asset class to assist in its further development and growth.”