Swiss Re Insurance-Linked Fund Management

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Video: Swiss Re talks to A.M. Best on catastrophe bond market growth


Ratings agency A.M. Best recently spoke with a number of executives from Swiss Re about the growth of the catastrophe bond market in 2013. Topics covered include how inflows of third-party capital have helped pricing on cat bonds drop to become more competitive and how growing catastrophe exposures could lead to increased use of cat bonds in the future.

The A.M. Best TV episode features:

  • Marcus Schmutz, Head of U.S. Structuring and Originating, Swiss Re;
  • Thomas Holzheu, U.S. chief economist, Swiss Re;
  • Megan Linkin, Atmospheric Perils Specialist, Swiss Re; and
  • Asha Attoh-Okine, Managing Senior Financial Analyst, A.M. Best Co.

Watch the video below or scroll down for more details on its content:

Video content:

The increased use of catastrophe bonds, a result of a growing catastrophe risk and a wider investor base, has led to aggressive pricing, putting the bonds on par with reinsurance. Thomas Holzheu, U.S. chief economist for Swiss Re, said that along with low interest rates, the amount of cat risk that needs to be insured is growing at a clip that’s faster than the economy is growing. Megan Linkin, a natural hazard expert with Swiss Re, concurred, pointing to development and noting that tornado strikes today may hit a suburban development that in the past may have been large agricultural fields or forested areas. Marcus Schmutz, head of U.S. structuring and originating for Swiss Re, talked about how in the past, the high price of cat bonds had been offset by features that make them more attractive than traditional reinsurance.

Also see our articles which refer to Swiss Re’s recently published ILS Market Update report:

2013 cat bond and ILS issuance passes $5Bn, over $18Bn outstanding

Tight spread environment for catastrophe bonds to continue: Swiss Re

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