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How the recent AIR Worldwide CATRADER® update benefits cat bond investors


Earlier this month AIR Worldwide announced a new and updated version of their hurricane model which features as part of their CATRADER® software for investors of catastrophe bonds and insurance-linked securities. Right at the bottom of the press release was a line referring to ‘a new Catastrophe Bond Summary Report that combines information from the catastrophe bond offering circular with CATRADER loss data’. That sounded interesting to us (and to our readers) so we contacted AIR for further information.

The Version 12.0 release includes a number of software enhancements that will enable investors in insurance-linked securities and catastrophe bonds to better manage their portfolios. When a bond is issued,  CATRADER allows users to  import information that is typically found in the offering circular of most cat bonds and reflects some of the key attributes of each contract. Users can then quickly and accurately evaluate potential investments and analyse the impact on their existing portfolio. This also allows for more detailed reporting options of cat bond programs. Users can sort and group their treaties using this information and export data for other uses such as reporting.

The new report in CATRADER Version 12.0 utilises this information from the offering circular. The Catastrophe Bond Summary Report details cat bond contract information as well as expected loss percentages. The report combines information from the cat bond-offering circular with CATRADER loss data to provide users with a detailed snapshot of the cat bonds in their portfolio.

“By combining information from the catastrophe bond-offering circular with expected losses from CATRADER, AIR’s new Catastrophe Bond Summary Report helps clients to better manage their portfolios of insurance linked securities by centralizing the
information they need in one report,” said Pascal Karsenti, manager, insurance linked securities, AIR Worldwide. “Now, investors and reinsurers can more easily create detailed reports directly from AIR’s software.”

AIR is currently working to update its database of cat bonds to include all of this additional information and the updated database will be made available to clients as soon as these enhancements are complete.

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