It’s become apparent that reinsurers are going to have to wait until December to get a final loss estimate from the ISO’s Property Claims Services unit. This won’t please those waiting to here whether any instruments such as catastrophe futures, options or bonds have been triggered.
How the final figure will affect the market remains to be seen. The catastrophe bond market, for instance, has gone particularly quiet due to the financial crisis being experienced by markets globally as participants get to grips with the potential difficulties in placing deals. We here that the pipeline for cat bonds is still looking active although deals are slower to come to market due to the tentative way issuers are approaching selection of counterparties. Some commentators are speculating that more traditional forms of reinsurance may see a resurgence next year as parties shy away from the complexities of the markets, on the flip side both Munich Re and Hannover Re have both announced that they expect the market to harden in the coming months.
If you have any insights as to the health of the marketplace, please do reply with your comments.