Record first quarter non-life ILS issuance

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  • New highs: the latest ILS Market Update from Willis Towers Watson Securities reveals strong trends in non-life ILS issuance

    New highs: the latest ILS Market Update from Willis Towers Watson Securities reveals strong trends in non-life ILS issuance


Far from recoiling from loss events in 2017, insurance-linked securities investors are “reloaded and ready” for next month’s Florida renewals, according to Willis Towers Watson Securities.

The company’s ILS Market Update also shows that outstanding capacity under catastrophe bonds is greater than ever.

Willis Towers Watson Securities is the investment banking business of leading global advisory, broking and solutions company, Willis Towers Watson. Its report shows that the first quarter of 2018 saw $3.1 billion of underwritten, widely-distributed non-life ILS capacity issued through 12 catastrophe bonds, compared to $1.7 billion through five bonds in the same quarter last year. It is the largest first-quarter issuance in the history of the non-life ILS market, and the third-highest quarter on record.

A total of $26.6 billion of non-life capacity was outstanding at the end of the quarter, up $1.1 billion to a record high. Most were market-diversifying transactions, including bonds for first-time sponsors Chile, Colombia, and Peru, and by repeat Japanese cedants Zenkyoren, Mitsui Sumitomo Insurance, and Tokio Marine & Nichido Fire. As a result of this diversifying issuance, only 63 per cent of outstanding capacity is exposed to US Wind, the lowest in the last ten years.

William Dubinsky, managing director and head of ILS, said: “We expect the current trends in ILS growth to continue. Without a true surprise loss, like an ice-storm in Miami, end-investors will continue to allocate capacity to ILS. Yield increases under government bonds are expected to be neutral or maybe even slightly positive for issuance and asset growth, and even more importantly, we will continue to see a trend towards true syndication, reducing the power of large leading markets. All this will put the reinsurance market’s traditional pricing cycle on life support.”

The full report can be downloaded at https://tinyurl.com/y8djl8ge

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Published Apr 27, 2018 at 8:00 am (Updated Apr 26, 2018 at 10:49 pm)

Record first quarter non-life ILS issuance

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