July 7, 2015

Bermuda Stock Exchange cat bond & ILS listings near $17.5 billion

Following an impressive 2014 the Bermuda Stock Exchange (BSX) has passed yet another milestone, revealing that a significant $17.462 billion catastrophe bonds, ILS, sidecars and reinsurance investment funds are now listed on the Exchange.

The growth of insurance-linked listings on the BSX has been impressive over the years, and the almost $17.5 billion of listings reflect the growing acceptance of insurance-linked securities (ILS) structures, including catastrophe bonds, investment funds, sidecars and collateralized reinsurance.

Artemis has tracked the development and growth of the ILS and cat bond listings at the BSX since it first surpassed the $1 billion mark, roughly five years ago. By the end of Q1 2014 BSX ILS and cat bond listings had moved beyond the $10 billion milestone for the first time, and had added roughly $7.4 billion of listings in the prior 15 months alone.

The strong growth of ILS listing on the BSX continued apace. As of 31st December 2014 the total listings at the exchange amounted to $15.912 billion, and despite a large volume of deals maturing during the first two quarters of 2015, strong cat bond issuance during Q2 has now helped the BSX surpass the $17 billion mark.

President and Chief Executive Officer (CEO) at the BSX, Greg Wojciechowski commented; “ILS is an exciting, developing asset class with a solid future ahead. The BSX is delighted to have been able to work with and support a group of dedicated professionals locally and abroad in furthering the development of this asset class. We are honoured by the support the global ILS industry has shown the BSX which is a direct driver of the results reported.”

With fewer deals scheduled to mature for the remainder of this year, but investor and sponsor appetite looking set to continue the trend witnessed in the first-half of 2015, we expect this figure to grow further, perhaps nearing, or even exceeding the $20 billion landmark.

Of the $17.462 billion of insurance and reinsurance linked listings at the BSX at the end of June 2015, roughly $16.562 billion came from catastrophe bonds, highlighting the supremacy the exchange has within the catastrophe bond space.

To put that figure into context, Artemis currently sees the outstanding catastrophe bond and life related ILS market as $24.681 billion in size. With the BSX having $16.562 billion of cat bonds now listed on the Exchange, it now accounts for a huge 67% of the outstanding market.

A further $535 million comes from two insurance-linked funds listed on the exchange. One of which is managed by Blue Capital Management and equates to $213 million, with the other $322 million being contributed by CATCo, through its Reinsurance Opportunities Fund.

The remaining $365 million comes from the exchange’s listed collateralized reinsurance sidecar notes, all of which are currently sponsored by reinsurance giant Munich Re. The transactions issued under the reinsurer’s sidecar series Eden Re I and Eden Re II, consist of three tranches of notes, and have shrunk by $63 million from the end of 2014.

Since the beginning of 2015 the BSX has continued its impressive growth rate of ILS, catastrophe bonds and reinsurance-linked listings, with the number of individual securities listed on the exchange now totalling 138. This represents a 14.5% increase in the number of listed insurance-linked securities in the last six-months alone, and a volume increase of 8.9%, or $1.55 billion.

Commenting on the outlook for the BSX, Wojciechowski said; “The BSX looks forward to its continued work with this industry segment to help further develop the ILS asset class and to fortify Bermuda’s position as the centre of excellence for the creation, support and listing of ILS vehicles.”

Below is a useful list of the entire $17.462 billion of the insurance and reinsurance-linked listings on the Bermuda Stock Exchange, broken down into reinsurance-linked investment funds, reinsurance sidecars and catastrophe bonds.

You can read about every catastrophe bond and ILS transaction in the Artemis Deal Directory.

Source: Artemis

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