Aon Benfield Securities, the securities and investment banking operation of Aon Benfield, reinsurance intermediary and capital advisor, today announces the launch of its latest report on the insurance-linked securities sector.
The Insurance–Linked Securities Third Quarter Update 2010 highlights that issuance of insurance-linked securities (ILS) was in line with expectations in the third quarter. The report also details the Aon Benfield ILS Indices, which posted exceptional returns due to an overall increase in demand for catastrophe bonds and a mild U.S. Hurricane season through September 30.
Aon Benfield Securities publishes its indices each month on Bloomberg and through the Thomson Reuters online ILS community.
Two catastrophe bonds were brought to market during the period, transferring a total of $232 million of risk into the capital markets. As of September 30, 2010, a total of $2.8 billion of new ILS transactions had been brought to market in 2010 and $11.1 billion of catastrophe bonds were outstanding.
Paul Schultz, President of Aon Benfield Securities, said: “Year-to-date issuance in the ILS market has been dominated by transactions covering U.S. Hurricane, pushing investors’ exposure to previously unseen levels. This phenomenon has led to strong investor demand for insurance-linked securities without U.S. Hurricane risk, in an ongoing attempt to achieve diversification across their portfolios. With some rebalancing of investors’ portfolios and scheduled upcoming maturities, demand for U.S. Hurricane risk will improve into the fourth quarter.”
Secondary trading during Q3 was variable, with heavy trading volumes in short-dated U.S. Hurricane and Europe Windstorm bonds seen in August and September. Throughout the quarter, investor demand in the secondary market remained strong.
Source : Aon Benfield Press Release