SNL Financial Issues Catastrophe Bond Report

May 6, 2013

Strong investor demand will spur creation of catastrophe bonds and special-purpose vehicles in Bermuda and Cayman throughout thes year, SNL Financial L.C. said in a report.

Charlottesville, Virginia-based SNL — provides news, financial data and analysis on business sectors critical to the global economy – said nine new entities registered in Bermuda and the Cayman Islands during the first quarter of 2013. Bermuda registered eight of the special purpose insurers, and the Cayman licensed one class C entity.

Notable first-quarter deals this year included Caelus Re 2013 Ltd., which provides $270 million of capacity to sponsor Nationwide Mutual Insurance Co. for US hurricane and earthquake exposures; and Tar Heel Re Ltd., a $500 million cat bond on behalf of the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association for hurricane risks.

“Even after an active 2012, the appetite for special-purpose insurance vehicles does not appear to be sated, judging by the slew of new formations thus far in 2013,” SNL said in the report released on Thursday [May 2].

“The annualised first-quarter number would exceed the 2011 level, when 29 entities were registered between the two islands, but it would fall short of 2012, when more than 40 were registered.”

“All told, more than $1 billion flowed to special purpose vehicles in the first quarter, which is a conservative estimate …”

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