The latest report on the insurance-linked securities (ILS) market from Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, reveals that “catastrophe bond issuance for the period reached $2.1billion, as investors continued to deploy capital into the sector.”
The report concludes that the ILS market is “retaining strong momentum from Q1, where ILS issuance reached record levels with $1.5 billon of deals brought to market, a total of seven transactions closed during Q2 2012, featuring both new and repeat sponsors.”
In addition, in contrast to the negative returns of Q1 2012, Aon Benfield said their “ILS Indices rebounded in Q2 to all post mark-to market gains. The All Bond and BB-Rated Bond Indices increased by 2.74 percent and 2.49 percent respectively, while the U.S. Hurricane Bond and U.S. Earthquake Bond Indices increased by 1.94 percent and 2.32 percent respectively during the period.”
CEO of Aon Benfield Securities Paul Schultz commented: “The Q2 ILS issuance figures were excellent, and brought the total issuance for the first half of 2012 very close to record levels. Issuance for the first half stood at $3.6 billion, which was just short of the all time high of $3.8 billion achieved during the same period in 2007.
“The pipeline for the remainder of 2012 remains strong, and we are pleased to see healthy levels of capital inflows from both seasoned investors and newer entrants to the ILS sector.”
Aon Benfield Securities also said it is maintain the “higher end of its Q1 2012 forecast that full year 2012 ILS issuance will be in the region of $6 billion.”
Source: Aon Benfield Securities
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