Posted on 19 Aug 2010
Aon Benfield Securities, the securities and investment banking operation of Aon Benfield, the world's premier reinsurance intermediary and capital advisor, has announced the launch of the Aon Benfield ILS Indices, which provide a quantitative view of monthly insurance-linked securities (ILS) returns since December 2000.
The ILS Indices track the performance of catastrophe bonds in each of four portfolios: All Bond, BB-rated Bond, U.S. Hurricane Bond, and U.S. Earthquake Bond. Each index is a total return index representing the return an investor would have achieved by allocating an amount of capital weighted to each catastrophe bond available in the market at a particular point in time. The Indices have been calculated by Thomson Reuters, the leading information provider to the ILS sector.
In addition to demonstrating the ongoing value inherent in the ILS market, the ILS Indices provide a point of comparison with other financial market measures. They represent an increase in transparency of returns in the market sector.
Over the past year, both ILS issuers and investors have adapted to a new capital markets landscape, which is evidenced by the evolution of the asset class. Despite continued uncertainty and volatility in the global capital markets generally, the global ILS market continues to provide capital value to investors, as demonstrated by the Indices.
Paul Schultz, President of Aon Benfield Securities, said: "The launch and ongoing administration of the Aon Benfield ILS Indices demonstrate the firm’s continued leadership in the insurance-linked securities market. Additionally, we believe the added data and transparency will lead to new investment in this market and provide greater capital alternatives for our clients.”
Recent trends revealed by the Aon Benfield ILS Indices include:
· All Bond Index posted a 12.85 percent return for the 12 months ending June 30, 2010 compared to 2.94 percent the prior year
· The BB-rated Bond and Aon Benfield U.S. Hurricane Bond indices produced similar results at 12.95 percent and 15.18 percent returns respectively
· The Aon Benfield U.S. Earthquake Bond index gained 7.04 percent.
Aon Benfield Securities will publish the Indices each month.