Bermudian reinsurance company Ascendant has been involved in a historic first catastrophe risk trade on the New York Mercantile Exchange.

The deal was brokered by GFI Group between global reinsurer Swiss Re and Ascendant.

The trade was an option on the nationwide catastrophe risk futures contract.

Catastrophe derivatives enable tailored trading and hedging of combinations of risks. The trade was based on the Re-Ex Index - an index calculated by reinsurance intermediary and advisory firm Gallagher Re, and which includes all natural catastrophes apart from earthquake and terrorism.

Albert Selius, head of the insurance-linked securities trading desk at Swiss Re Capital Markets, said: "We are always looking to trade cat risk in the best format. We welcome the NYMEX initiative as it provides an alternative platform for natural catastrophe trading in addition to the traditional industry loss warranties market."

Ascendant president and CEO Rick Pagnani said: "We are happy to have participated in the inaugural trade, but, more importantly, we are excited at the prospects for this market.

"These cat derivative contracts add a new dimension to risk management and give (re)insurers and capital market participants alike with a new way to enhance risk-adjusted returns."

And Ian Clague, GFI's head of commodity broking for the Americas, added: "GFI has a record of helping new derivatives markets develop and we are proud to have brokered this first trade on Nymex.

" We are seeing financial institutions starting to trade and manage reinsurance and derivatives are making this more standardised and accessible."

According to NYMEX chairman Richard Schaeffer the Exchanged was "excited to develop innovative risk management tools, such as the catastrophe risk options contract.

This contract introduces a new industry to the price mitigation services NYMEX provides and serves as a complement to its existing product slate."