ILS listings on BSX hit record $24.5bn

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  • Record levels: Greg Wojciechowski, CEO of the BSX, which has ILS listings with a value of more than $24 billion

    Record levels: Greg Wojciechowski, CEO of the BSX, which has ILS listings with a value of more than $24 billion

A new record of $24.5 billion in insurance-linked securities and other vehicles were listed on the Bermuda Stock Exchange by the middle of the year.

The 16 per cent increase on the $21.22 billion listed at the end of 2016 was hit at the end of June — and the figure is expected to increase significantly by the end of the year, specialist website reported yesterday.

The total number of ILS listings of cat bonds, ILS, reinsurance sidecar notes and insurance-linked investments is now 218, a 25 per cent increase over the six-month period.

Greg Wojciechowski, CEO of the BSX, said: “That’s a pretty high proportion of global ILS listings. We have a couple of cat bond funds, so there will be a little bit of double counting.”

He added: “The ILS asset class is becoming more and more accepted by global institutional investors and the market is predicting more and more securities.

“Bermuda has a long history of innovation in the reinsurance space and ILS is one of those innovations Bermuda focused on years ago.”

Mr Wojciechowski said that the island’s strong business base allied with a respected regulatory authority meant that Bermuda was regarded as “a centre of excellence” both for local listings and international ones.

He added: “Bermuda has worked really hard to position itself here and as a centre of excellence, it was logical things developed here.”

Mr Wojciechowski predicted that he expected the market to continue to develop in the second half of the year.

He said: “I don’t have the crystal ball on it, but if we look back at how the market has developed over the last few years, it’s certainly a good indicator of contingent growth.

“We will have to wait and see but the market continues to innovate, new risks are transferred and there is more market participation — all the ingredients are there for further development.

Artemis statistics showed a global $7 billion of second quarter cat bond and ILS issuance, plus a record-breaking first quarter, taking the outstanding market to a record $29.3 billion at the end of the first six months of the year.

Artemis said: “As the ILS market continues to expand its remit, Bermuda is clearly benefiting from its ability and position as a global ILS domicile, attracting new vehicles and capacity.

“It will be interesting to see if the strong growth trend witnessed in the opening half of the year persists and just how many ILS listings exist on the BSX and the volume this represents at the end of 2017, which is already a record-breaking year for cat bond and ILS issuance.”

The global reinsurance market, however, continues to suffer soft pricing, a trend which is expected to continue, and increased competition.

Midyear renewals showed that ILS and collateralised reinsurance markets continue to increase their overall share of the sector, causing further price declines, especially in property catastrophe business.

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Published Jul 6, 2017 at 8:00 am (Updated Jul 5, 2017 at 11:54 pm)

ILS listings on BSX hit record $24.5bn

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