Willis ILS Report: 2012 Sees Second Strongest Catastrophe Bond Issuance on Record
Strong 2012 Issuance Signals Growth
London, UK, January 31, 2013 – Last year saw the second highest level of catastrophe bond issuance
on record signalling strong growth in the market, according to Willis Capital Markets & Advisory (WCMA),
part of global insurance broker, Willis Group Holdings (NYSE: WSH).
At year end $5.9 billion of catastrophe bonds had been issued, representing a 37% increase over 2011,
according to the latest Insurance-Linked Securities (ILS) Market Update from WCMA.
The fourth quarter of 2012 saw new issuance volume of $1.9 billion of non-life capacity. This capacity
was issued through seven transactions, which compares with the same volume ($1.9 billion) in nine deals
in Q4 2011. Three transactions were sponsored by reinsurers, three by primary insurers and one by
a government entity.
US hurricane risk continues to be the predominant catastrophic natural peril being securitized and sold in the
capital markets – with 71% of outstanding cat bond limits exposed to some form of US
While money continued to flow into ILS funds during the final quarter of 2012, primary issuance was
still insufficient to meet investor demand. This triggered bidding wars on some bonds.
Bill Dubinsky, Head of ILS at WCMA, said: “Most ILS investors were hoping that early December would
be full of new issuances as it had been historically. However they were disappointed to have
fewer bonds than necessary to meet their cash inflows. We believe investors will anxiously welcome the
new issuances that are in the pipeline.”
The full year report also features an interview with Gary Martucci, Director of Standard & Poor’s Financial
Services Ratings Group.
Willis Capital Markets & Advisory, with offices in New York and London, provides advice to insurance and
reinsurance companies on a broad array of merger and acquisition transactions as well as capital markets
products such as insurance-linked securities. Nothing in this communication constitutes any legal or financial advice or
an offer or solicitation to sell or purchase any securities.
Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers
professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public
entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries,
with a global team of approximately 17,000 employees serving clients in virtually every part of the
world. Additional information on Willis may be found at www.willis.com.
Forward Looking Statements
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address activities, events or developments that we expect or anticipate may occur in the future are
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