Catastrophe bond news

The outstanding catastrophe bond and insurance-linked securities market, based on transactions listed in the Artemis Deal Directory, has reached a new all-time high of $23.431 billion, demonstrating that ILS and cat bonds continue to generate strong interest.

The latest catastrophe bond from U.S. primary insurer USAA, the Residential Reinsurance 2014 Ltd. (Series 2014-2) deal, has not increased in size while being marketed, we understand, but the price guidance range has been narrowed towards the mid-point.

The settlement and completion of the $500m Kilimanjaro Re Ltd. (Series 2014-2) catastrophe bond today takes 2014 issuance of new cat bonds and insurance securitisations to $7.143 billion, keeping the market on track for a possible record year.

The insurance-linked securities (ILS) market, consisting of instruments such as insurance-linked funds, catastrophe bonds, sidecars and other fully-collateralized reinsurance structures, is set to continue to evolve in coming years, according to market participants.

In another sign that investors will not keep lowering the relative returns on catastrophe bonds the Ursa Re Ltd. (Series 2014-1) cat bond, sponsored by the California Earthquake Authority, has been priced above the original mid-point.

Here are the ten most popular news articles, week ending 16th November 2014, covering catastrophe bonds, ILS, reinsurance capital and related risk transfer topics. To ensure you never miss a thing  subscribe to the weekly Artemis email newsletter updates.

The World Bank is exploring potential new transactions as part of its Capital-at-Risk Notes Program, where it issues catastrophe bonds on behalf of sovereign entities. The Bank is also considering ways to use the facility to provide health risk transfer as well.

In a clear demonstration of the maturation of the insurance-linked securities (ILS) market, participants at the ILS Bermuda Convergence 2014 event in Bermuda this week called for it to move beyond being considered an alternative to reinsurance.

It’s interesting to note that even in the currently low-priced, buyers reinsurance market and with ever greater quantities of alternative and ILS capital ready to take on risk, attitudes to reinsurance and retrocession buying can differ wildly.

The anticipation of a brisk last two months of the year, with reports that a number of billion dollars worth of new catastrophe bonds may come to market, stimulated secondary ILS trading activity in October despite the primary market remaining quiet.