Aon Benfield: Cat Bond Issuance Breaks Record

April 17, 2015

Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, released its latest report on the insurance-linked securities [ILS] sector, which analyses the key trends witnessed in the first quarter of 2015.

The report, Insurance-Linked Securities First Quarter 2015 Update, reveals that catastrophe bond issuance for the period reached a record USD1.7bn – higher than any other first quarter issuance in the history of the ILS sector.

The quarter comprised seven property catastrophe bonds and one health transaction and brought, as of March 31, 2015, total catastrophe bonds on-risk to USD22.1bn, a slight decrease on the record USD24.3bn seen at year-end 2014, as USD3.9bn of bonds came off-risk during the first quarter period.

Paul Schultz, Chief Executive Officer of Aon Benfield Securities, said: “Several records were set in the ILS market during 2014, and 2015 has continued in the same vein, with a record first quarter issuance total, and a consistently high level of transactions on-risk.

“There remains strong interest in the market from sponsors, and from investors who, despite having accepted decreased interest spreads, continue to allocate high volumes of capital to primary issuances.

“The ongoing success of the sector is partly being driven by the structuring of innovative transactions, for which we continue to see new perils, territories, and structural features being added to address individual risk requirements.”

The first quarter study reveals that in the three months to March 31, 2015, the Aon Benfield BB-rated Bond Index and the U.S. Earthquake Bond Index both posted positive returns of 0.42 percent and 0.69 percent respectively.

The Aon Benfield All Bond and U.S. Hurricane Bond indices were negative for the quarter, with losses of -0.26 percent and -0.55 percent respectively. The Aon Benfield ILS Indices are calculated by Bloomberg using month-end price data provided by Aon Benfield Securities.

To view the full Insurance-Linked Securities First Quarter 2015 Update, please follow the link

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