trading

BMS Re, the reinsurance arm of the international broking group, has hired former Nephila Capital employee Brendan O’Brien to further build out its Bermuda reinsurance and retro offering, as well as to support its secondary catastrophe bond trading plans.

Trading of catastrophe bond notes in the secondary market has picked up in the last few weeks as cat bond fund managers and investors look to adjust their portfolios to accommodate the brisk flow of newly issued deals, helped in part by a record over $2 billion of issuance in April 2023, by Artemis’ numbers.

The insurance-linked securities (ILS) desk of Tullett Prebon, part of TP ICAP, will have a new leader, with Josh Stannack set to take on the Head of TP ILS position, and the desk’s founder Steve Emmerson will remain integral to the business in a part-time role.

Catastrophe bonds experienced a price recovery in January, promising to help cat bond funds and investors to a stronger month of returns following a quarter where active selling drove prices lower and the cat bond market’s total-return had suffered.

The recent selling off of catastrophe bonds, which has largely provided a mechanism for ILS fund managers to free up capital to put towards renewal deals, has resulted in much higher secondary market trading volumes but this has added mark-to-market price pressure and as a result dented total returns.

Trading of catastrophe bonds in the secondary market has increased in the last fortnight as some ILS fund holders free up capital in advance of the approaching reinsurance renewals, so the benefits of the liquidity within these the fully securitized instruments becomes evident again.

Speaking at the recent SIFMA IRLS 2018 conference in Miami, insurance-linked securities (ILS) market participants and experts highlighted the benefit of increasing the speed of information flow to the market, something which could help the secondary market operate more efficiently when disaster strikes.

Once again the discussion of exchange-traded weather risk management products for Indian farms, companies and insurers has come to the fore, but this time the plan is for a product to be launched after September of this year.

Trading of catastrophe bonds in the secondary market was a little slower last week, with just four bond trades recorded by FINRA’s TRACE system. However the focus remains on higher coupon cat bonds, as some investors snap up any that are offered in the market.

Once again, the last week has seen an increasing focus on higher yielding catastrophe bond notes in the secondary trading market, as investors seek to maximise their returns with any opportunities to buy notes that yield above the average of recent new issuance.