The value of Insurance Linked Securities (ILS) listed on the Bermuda Stock Exchange has risen above $1 billion for the first time after a record number of cat bonds were listed this year.

To date, the 10 cat bonds with a combined value of $1.174 billion have been listed on the BSX, with three listed since the end of 2009 - State Farm's Merna Re II ($350 million), Flagstone Reinsurance Holdings SA's Montana Re transaction ($175 million) and an issuance from Chartis, Lodestone Re - worth $425 million alone.

And the Exchange, which has benefited from new insurance regulations brought in by the Bermuda Monetary Authority (BMA) that make it easier to form and list ILS such as cat bonds, is expecting more companies to list their cat bonds on the BSX in the second half of 2010.

A press conference was held to make the announcement at the 8th ILS Summit held at the Fairmont Southampton yesterday.

"We would like Bermuda to become the platform of choice for listing of cat bonds," said Greg Wojciechowski, president and CEO of the BSX. "It makes sense, the sponsors are here, the special purpose insurers are set up here and the Exchange is here."

He said the publicity following this year's listings had pushed the BSX forward in the view of the capital markets, as well as raising the profile of the jurisdiction and the Exchange since it entered the market a year ago.

Strong demand from investors and sponsors has led to $2.4 billion of new capacity issuance globally so far in 2010, and almost one third of this capacity listed on the BSX through Mena Re II and Lodestone Re.

Brenton Slade, chief marketing officer at Flagstone Re, which listed Montana Re on the BSX in December 2009, said: "We were delighted to list Montana Re on the BSX. Listing can attract more institutional investors into this market, and we found the process of listing both simple and easy."

He said ILS was a means of attracting a bigger pool of institutional investors as witnessed in Flagstone's own cat bond listing.

Mr. Wojciechowski said the move towards the listing of ILS on the BSX had put the Exchange, issuers and Bermuda firmly at the forefront of the convergence between the insurance and capital markets, had added value to them, and the interest had continued to grow.

"The BSX is a fully electronic and internationally recognised stock exchange and we operate as an equity and fixed income market," he said.

"This is an asset class that has very little correlation with broader capital market risks and we would be remiss not to support it."

Andre Perez, chief executive of the Horseshoe Group, an independent insurance management services company with operations in Bermuda and Cayman, said he was pleased to see the BSX list more cat bonds.

"It is an exciting development and can offer institutional investors a level of comfort in knowing that the cat bond is listed on a reputable exchange," he said.

He continued: "Bermuda is known for being the innovative centre in terms of reinsurance products and structures and the fact that we are now having a few cat bonds issued in Bermuda is quite exciting because I have been working quite closely with the BMA to set up a new regulatory regime in Bermuda for special-purpose insurers (SPIs) and now I think it is starting to bear fruit.

"We are now able to be a viable alternative to Cayman, which makes sense because we are the largest property and casualty market in the world.

"And I think any development in the ILS space is going to be beneficial to Bermuda."

Bermuda is the world's third largest reinsurance market and is already home to 1,400 insurance companies with total assets of $442 billion, and many of its reinsurance companies have issued cat bonds or set up special purpose vehicles like sidecars.

The international upsurge in interest in ILS, which includes catastrophe bonds and sidecars, comes as institutional investors emerge from the market turmoil looking for non-correlated investments.

Last year, the BMA introduced specific risk-based regulations for the establishment of SPIs as a new class of insurer in Bermuda's insurance class system.