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Records smashed as insurers secure $4.5bn of catastrophe bond coverage in second quarter, according to Aon Benfield ILS study

Chicago, 07/08/2014 – Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, today launches its latest report on the insurance-linked securities (ILS) sector, which reviews the key trends witnessed during the second quarter of 2014.

The Insurance-Linked Securities Second Quarter 2014 Update reveals that 12 catastrophe bonds closed during the period with a total value of USD4.5bn – the most of any quarter in the entire history of the ILS market. 

When combined with the near-record first quarter catastrophe bond issuance of USD1.4bn, the ILS market witnessed a record first half 2014 issuance of USD5.9bn – exceeding the prior year period by almost 50 percent (1H 2013: USD4.0bn).

As at June 30, 2014, total catastrophe bonds outstanding remained at a record high, with USD22.4bn of bonds on-risk.

Meanwhile, market pricing conditions for ILS products remained in line with historical lows during the second quarter, as investor demand kept pace with increased supply, allowing sponsors to expand coverage at competitive rates. 

Paul Schultz, Chief Executive Officer of Aon Benfield Securities, said: “After a strong 2013, the ILS market has managed to increase its momentum through the first and second quarters of this year, with new records being set for issuance volumes and more catastrophe bonds on-risk than at any other time in the market’s history. We believe that there are still further opportunities for expansion, especially if the sector continues to innovate in terms of its product offerings.  For instance, our recently launched CATstream facility enables our clients to access capital markets capacity in around half the time than for a traditional catastrophe bond solution.”

The Insurance-Linked Securities Second Quarter 2014 Update highlights that, for the second quarter of 2014, each of the Aon Benfield ILS Indices posted an increase: the All Bond and BB-rated Bond indices gained 0.80 percent and 0.32 percent respectively, while the U.S. Hurricane Bond and U.S. Earthquake Bond indices gained 0.86 percent and 0.87 percent respectively.

For the trailing 12 months, as at June 30 all Aon Benfield ILS Indices posted gains, with the All Bond and BB-rated Bond indices gained 7.74 percent and 4.99 percent respectively, while the U.S. Hurricane Bond and U.S. Earthquake Bond indices gained 8.94 percent and 4.33 percent respectively.

With strong growth continuing in this sector, Aon Benfield Securities forecasts that 2014 could be a record year for the ILS market. 

To view the full Insurance-Linked Securities Second Quarter 2014 Update report, please follow the link below:

http://bit.ly/1pWYnD8

 

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About Aon Benfield Securities

Aon Benfield Securities, Inc. and Aon Benfield Securities Limited (collectively, “Aon Benfield Securities”) provide insurance and reinsurance clients with a full suite of insurance-linked securities products, including catastrophe bonds, contingent capital, collateralized reinsurance, industry loss warranties, sidecars and derivative products. As a recognized leader in this investment banking market, Aon Benfield Securities is helping clients to empower results by offering underwriting and placement of new issues, financial advisory services, as well as securities trading in the secondary market. Aon Benfield Securities’ integration with Aon Benfield Inc’s reinsurance operation expands its capability to provide analytics, modeling, rating agency, and other consultative services.  Aon Benfield Inc., Aon Benfield Securities, Inc. and Aon Benfield Securities Limited are all wholly-owned subsidiaries of Aon plc.  Securities advice, products and services are offered solely though Aon Benfield Securities, Inc. and/or Aon Benfield Securities Limited.

About Aon Benfield

Aon Benfield, a division of Aon plc, is the world’s leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world’s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals’ expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com.

About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global and principle partnership with Manchester United

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Aon Benfield 

Aon Benfield

Aon Benfield

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