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Member, Beacon International Group, Ltd.
MONTE CARLO, Monaco—Interest in catastrophe bonds is picking up steam as the global financial crisis shows signs of easing and cat bond issuance this year is expected to equal or surpass last year’s total, an executive with a risk modeling company said Tuesday.
Due to the financial crisis, catastrophe bonds issued in 2008 totaled about $3 billion, off sharply from more than $7 billion issued in 2007, S. Ming Lee, president and chief executive officer at AIR Worldwide Corp. in Boston, said during said an interview at the Rendez-Vous de Septembre reinsurance meeting in Monte Carlo, Monaco.
As the economy recovers, however, interest in cat bonds is increasing, he said.
“I would expect that 2009 would end up with a total issuance that meets or exceeds what we saw in 2008,” Mr. Lee said. “There is definitely activity in the pipeline” regarding transactions that should be completed by the end of the year.
AIR provides risk modeling and analytical services for cat bond transactions.