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    WCMA: Q1 2014 Sees Investor Base Broaden

    New York, April 8, 2014 – The first quarter of 2014 saw increasing participation from money managers and mutual funds investing directly in insurance-linked securities (ILS), according to a report issued by Willis Capital Markets & Advisory (WCMA), part of Willis Group Holdings plc (NYSE: WSH), the global risk advisor, insurance and reinsurance broker.

    Bill Dubinsky, Head of ILS at WCMA, said: “Money managers, mutual funds and ILS specialist investors still see significant value for their investors despite the fall in market clearing spreads. Note that a modest tick upwards in spreads would bring in a significant amount of additional capacity. As a consequence, the risk of running out of capacity seems limited.”

    The report found that Q1 2014 also saw $1.2 billion of non-life catastrophe bond capacity issued in six deals, compared to $1.6 billion (a) marketed in five deals during Q1 2013. It also found that the second quarter of 2014 is on course for strong levels of issuance, with the deal pipeline developing on the back of the successful executions in the first quarter. As is typical of any second quarter, the bulk of the deals are likely to include U.S. hurricane exposure with some opportunistic tranches thrown in to satisfy investors’ ongoing craving for further diversification in their portfolios.

    Dubinsky added: “There are several factors driving the uptick in deals. First, new issuance risk spreads have continued to trend downwards falling from 12.0% in Q3 2012 to 6.4% in Q1 2014. Second, terms have become more flexible to allow for deals tailored to a sponsor’s needs. This flexibility can sometimes increase risk spreads but sponsors at least have increased options. Third, speed to market is improving, reducing lead times between decisions to proceed and execution. Finally, sponsors and their brokers are getting better at resisting the siren call of overpriced private placements.”

    To access the report please click here.

    (a) Includes certain transactions marketed in Q1 and closed at the beginning of Q2. $520 million of bonds were issued in Q1, prior to April 1st.

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    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 Conduct Authority.

    This communication should not be regarded as an offer to sell or as a solicitation of an offer to buy, any security. The information contained herein is as of this date only, is subject to change and does not contain all information necessary to adequately evaluate an investment in any financial instrument. No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. Information contained in this communication may not reflect information known to other employees in any other business areas of Willis Group and its affiliates.

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