Almost everyone we speak to is bullish about the prospects for the catastrophe bond and insurance-linked securities market over the year ahead. Most people predict an issuance volume of at least equal to 2011, but some are predicting much higher. One of those people predicting a year of growth is Christophe Fritsch, head of insurance-linked securities at Axa Investment Managers, who in an interview with Bloomberg said he felt that cat bond issuance volume could grow by 30% to hit $6 billion in 2012.
Mr. Fritsch said that he expected more new sponsors to continue coming to market, while insurers sought to use cat bonds to raise capital after a heavy year of losses in 2011. So this increased demand should help to ensure a good year for issuance.
At the moment and increased demand for cover is able to be met by an increased demand from investors as well so increased cat bond issuance may help new participants enter the investment side of the market.
Let us know what you think 2012 will bring in the way of volume of cat bond and ILS deals issued by voting in our poll.