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Aon Benfield ILS Study: Insurance-linked Securities Issuance Breaches $2 Billion in 2Q

Posted on 26 Jul 2012 by Neilson

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AonAon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, today launches its latest report on the insurance-linked securities (ILS) market, which reviews the key trends witnessed during the second quarter of 2012.

The Insurance-Linked Securities Second Quarter Update 2012 reveals that catastrophe bond issuance for the period reached USD2.1bn as investors continued to deploy capital into the sector.

Retaining strong momentum from Q1, where ILS issuance reached record levels with USD1.5bn of deals brought to market, a total of seven transactions closed during Q2 2012, featuring both new and repeat sponsors.

Meanwhile, in contrast to the negative returns of Q1 2012, Aon Benfield's ILS Indices rebounded in Q2 to all post mark-to market gains. The All Bond and BB-Rated Bond Indices increased by 2.74 percent and 2.49 percent respectively, while the U.S. Hurricane Bond and U.S. Earthquake Bond Indices increased by 1.94 percent and 2.32 percent respectively during the period.

Paul Schultz, Chief Executive Officer of Aon Benfield Securities, said: "The Q2 ILS issuance figures were excellent, and brought the total issuance for the first half of 2012 very close to record levels. Issuance for the first half stood at $3.6bn, which was just short of the all time high of $3.8bn achieved during the same period in 2007. The pipeline for the remainder of 2012 remains strong, and we are pleased to see healthy levels of capital inflows from both seasoned investors and newer entrants to the ILS sector."

Aon Benfield Securities maintains the higher end of its Q1 2012 forecast that full year 2012 ILS issuance will be in the region of USD6bn.

To view the full Insurance-Linked Securities Second Quarter Update 2012 report, please follow the link below: