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Insurance-linked securities reach $4 billion in second quarter

Posted On: Jul. 25, 2018 2:33 PM CST

Insurance-linked securities reach $4 billion in second quarter

Property/casualty insurance-linked securities issuance totaled $4.0 billion in the second quarter of 2018 issued through 14 bonds, according to the July 2018 update from Willis Towers Watson Securities.

It was the third-highest second-quarter total for issuance, behind last year’s record $6.2 billion second quarter with 19 bonds and 2014’s second quarter with $4.5 billion issued through 13 bonds, according to ILS Market Update: Growth Through Innovation July 2018 from the securities unit of Willis Towers Watson P.L.C.

Issuance in the second quarter was dominated by U.S. wind and peak multiperil bonds in anticipation of the peak wind season, the report said. Of the $4.0 billion issued, $2.6 billion will provide peak multiperil protection, with the remaining $1.4 billion specific to U.S. wind.

The Texas Windstorm Insurance Association returned to the capital markets in May with Alamo Re 2018-1, providing $400 million of U.S. wind coverage through June 2021 on an annual aggregate basis using an indemnity trigger.

Citizens Property Insurance Corp. based in Tallahassee, Florida, also returned to the markets in May with Everglades Re II 2018-1 A providing $250 million in U.S wind coverage for three years using an indemnity trigger.

The largest bond of the quarter was Travelers Long Point Re III 2018-1, providing $500 million of peak multiperil coverage through June 2022 using an indemnity trigger.

“The ILS market remains strong post the various 2017 losses,” the report said. “End investors seem to have confidence in the market as evidenced by the strong buying in both primary and secondary markets. Robust trading has occurred across all perils and maturities.”