Bermuda has been trying to catch up with the Cayman Islands as a domicile for the insurance-linked securities and catastrophe bond marketplace after having slipped behind when the Caymans became the domicile of choice. The regulatory and legislative changes that Bermuda have made seem to be having a positive effect as the Bermuda Stock Exchange (BSX) announces a growing number of listed insurance-linked securities transactions.
Listing of insurance-linked securities remains a small part of the BSX’s overall business with the total market capitalization of the BSX sitting at over $1.4 billion at the end of 2010. The number of ILS listed rose to 19 this year with the help of the Lodestone Re, Montana Re and Merna Reinsurance II transactions. That took the market cap of BSX listed catastrophe bonds to approx $1.83 billion.
Commenting on 2010, BSX Chief Compliance Officer, Mr. James McKirdy said “This activity continues to underscore that the domestic capital market works and that Bermuda based investors have an investment appetite for well structured and regulated investment opportunities. Also, despite challenging economic times, new listings continue to be attracted to the BSX and the year ended with a record number of listed issuers, 807.”
BSX President and Chief Executive Officer Greg Wojciechowski stated, “The BSX ended the year with a record number of listed issuers of which we are very proud. We are equally as proud of assisting in raising Bermuda’s profile in the global financial markets for the creation, listing and capital market support services of Insurance Linked Securities, such as Catastrophe Bonds. Bermuda has an important role to play in supporting this dynamic and growing market which saw over $5 billion in new structure issuances in 2010 alone. The BSX entered this market much later than its competitors and the results to date have been impressive further deepening the Exchange’s commitment to this space. The BSX will work hard and closely with the insurance industry to provide additional levels of stock exchange support for these and other instruments so that Bermuda solidifies itself as the logical location for the convergence of the capital and insurance markets”