Fitch Ratings announced it has formed a global analytical working group that will rate all forms of insurance-linked securities.
The unit will analyze catastrophe bonds, redundant reserves, disability income, catastrophic mortality and embedded value transactions.
Fitch said its insurance-linked securities ILS working group will update Fitch's existing rating methodologies and develop new methodologies as the ILS marketplace rapidly evolves.
The ILS market witnessed nearly $5.6 billion of issuance in 2005 and $8.9 billion in 2006, an increase of 59 percent. Going forward, Fitch said it expects volume in this sector to increase by approximately 30 percent in 2007.
Current Fitch analysts who will devote time to the ILS working group come from Fitch's offices in Chicago, New York, London, Paris, Singapore, Sydney and Brisbane, the rating firm said.
“The move capitalizes on the need for expertise in both the insurance and structured finance sectors to appropriately assess and monitor the complex risk characteristics of these transactions,” said Donald Thorpe, head of the new global ILS group.
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