WCMA: Record Number of Cat Bond Deals in 2013; Annual Issuance of
New York, January 29, 2014 – Last year saw a record number of 29 catastrophe
bond deals, according to Willis Capital Markets & Advisory (WCMA), the capital
markets division of Willis Group Holdings (NYSE: WSH), the global risk advisor,
insurance and reinsurance broker.
Total issuance over the year of $7.1 billion was very close to the 2007 record of $7.2
billion, with non-investment grade and unrated issuance also recording a new high,
according to WCMA’s latest ILS market report.
Overall outstanding capacity at year-end reached $18 billion and has now grown at a
compounded growth rate of 18% since 2000. The fourth quarter of 2013 saw $1.8
billion of non-life catastrophe bond capacity raised in seven deals, whereas the fourth
quarter of 2012 saw $1.9 billion issued in seven deals.
All but one of the 2013 fourth quarter issuances were sponsored by repeat sponsors,
with Queen City Re, sponsored by newcomer American Modern Insurance, being the
Bill Dubinsky, Head of ILS at WCMA, said: “2013 may prove to be a pivotal year for
the cat bond and sidecar markets. On the one hand, 2013 was a banner year for cat
bonds, sidecars, and collateralized reinsurance with $7.1 billion in non-life cat bond
issuance and considerable sidecar activity despite the softening market conditions.
On the other hand, traditional reinsurers are reacting aggressively to maintain market
share by launching preemptive quotes to defend previously unassailable positions on
the programs of favored clients.”
Tony Ursano, CEO of WCMA, commented: “The reinsurance industry is in the midst
of a gradual transformation as the inflows of third party capital continue to increase.
We expect that 2014 will be marked by innovation, seeing new sponsors, new perils
and new structures come to market in an effort to meet investors demand for risk.”
The full report also features an interview with Peter Nakada, Managing Director of
Risk Markets of Risk Management Solutions, Inc.
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance
broker. With roots dating to 1828, Willis operates today on every continent with more
than 17,500 employees in over 400 offices. Willis offers its clients superior expertise,
teamwork, innovation and market-leading products and professional services in risk
management and transfer. Our experts rank among the world’s leading authorities on
analytics, modelling and mitigation strategies at the intersection of global commerce
and extreme events. Find more information at our website, www.willis.com, our
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WillisWire. Across geographies, industries and specialisms, Willis provides its local
and multinational clients with resilience for a risky world.
About Willis Capital Markets & Advisory
Willis Capital Markets & Advisory, with offices in New York, London and Hong Kong,
provides advice to companies involved in the insurance and reinsurance industry on
a broad array of mergers and acquisition transactions as well as capital markets
products, including acting as underwriter or agent for primary issuances, operating a
secondary insurance-linked securities trading desk and engaging in general capital
markets and strategic advisory work. Willis Capital Markets & Advisory is a trade
name used by Willis Securities, Inc., a licensed broker dealer authorized and
regulated by FINRA and a member of SIPC, and Willis Capital Markets & Advisory
Limited, an investment business authorized and regulated by the UK Financial
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