Demand for catastrophe bonds is rising, thanks to robust investor demand
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Robust investor demand will trigger the creation of more new catastrophe bonds and special-purpose vehicles throughout this year, SNL Financial L.C. said in a report last week.
Charlottesville, Va.-based SNL Financial said nine new entities registered in Bermuda and the Cayman Islands during the first quarter of 2013.
Notable first-quarter deals this year included Caelus Re 2013 Ltd., which provides $270 million of capacity to sponsor Nationwide Mutual Insurance Co. for U.S. hurricane and earthquake exposures; and Tar Heel Re Ltd., a $500 million cat bond on behalf of the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association for hurricane risks.
“Even after an active 2012, the appetite for special-purpose insurance vehicles does not appear to be sated, judging by the slew of new formations thus far in 2013,” SNL said. “The annualized first-quarter number would exceed the 2011 level, when 29 entities were registered between the two islands, but it would fall short of 2012, when more than 40 were registered.”
