Willis Capital Reports Strong Growth in Cat Bond Market; $1.3 Billion in Q1

The latest Insurance-Linked Securities (ILS) Market Update from Willis Capital Markets & Advisory (WCMA), part of global insurance broker Willis Group Holdings, notes a “record issuance in the catastrophe bond market in the first quarter of 2012, with eight new non-life issues providing over $1.3 billion of risk capital.

WCMA’s figures are slightly lower than the $1.49 billion provided by Aon Benfield in a similar report on insurance linked securities.

The quarterly report titled, “Strong Start to 2012 Sees Record First Quarter Issuance“, noted that the “market had $13.3 billion of outstanding non-life capacity at the end of the first quarter, two-thirds of which is exposed to U.S. hurricane risk of some form.”

WCMA’s report features an interview with Frank Majors of Nephila Capital, who “comments on the development of investor recognition of the ILS market and argues that assets under management will grow significantly as the market evolves and that capital should flow to the peak risks where it is most needed.”

Bill Dubinsky, Head of ILS at WCMA, indicated that the “market’s strong momentum from late 2011 has continued into the first quarter of 2012. Although spread levels have widened somewhat, we believe the medium term outlook for the market remains encouraging. Growth in insured exposures should continue to drive capital markets’ involvement in the catastrophe risk sector.”

Source: Willis Capital Markets & Advisory