LONDON (Reuters) – Sales of catastrophe bonds, used by insurers as a way of selling on their exposure to natural disasters, are close to levels last seen before the financial crisis, new data shows.
A flood of capital from pension and hedge funds, drawn by 5-7 percent yields for many so-called “cat bonds” when more traditional assets pay rock bottom rates, has driven down prices and hurt profitability for reinsurers.
Figures from insurance broker Willis published on Wednesday show total issuance during 2013 reached $7.1 billion, close to the $7.2 billion record reached during 2007.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
