Insurance-Linked Securities shine in new capital markets environment according to Aon Benfield study
ILS Indices evidence exceptional 13% annual investment return
Aon Benfield Securities, the investment banking division of Aon Benfield, the world’s premier reinsurance intermediary and capital advisor, today releases its annual review of the Insurance-Linked Securities (ILS) market.
The ILS Review 2010 – Market Momentum reveals that despite a challenging capital markets environment, the ILS sector continued to provide value to sponsors and investors.
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 ILS market continues to perform strongly, with returns increasingly significantly from the year ago period.
The study reveals that market activity remained high during the year ending June 30, 2010, with 20 new transactions totaling USD4.6bn brought to market, compared to just USD1.7bn across 11 transactions during the 12 months ending June 30, 2009.
According to Aon Benfield’s ILS Indices, the firm’s ILS benchmarking tool launched earlier this month, ILS products provided a total investment return of 12.85 percent for the year ending June 30, 2010 – up from 2.94 percent the previous year. These results are primarily attributable to mark-to-market gains across all perils.
Paul Schultz, President of Aon Benfield Securities, said: “Over the past year, the insurance-linked securities market has once again demonstrated its importance as a source of risk transfer capacity. The market has grown and evolved in response to a changing global economic environment, maintaining its relevance to both sponsors and investors. Our analysis elaborates on these market characteristics and offers a positive outlook for the future.
About Aon Benfield Securities
Aon Benfield Securities, Inc. and Aon Benfield Securities Limited (collectively, “Aon Benfield Securities”) provide insurance and reinsurance clients with a full suite of insurance-linked securities products, including catastrophe bonds, contingent capital, collateralized reinsurance, industry loss warranties, sidecars and derivative products. Securities advice, products and services are offered solely through Aon Benfield Securities, Inc. and/or Aon Benfield Securities Limited.
About Aon Benfield
As the industry leader in treaty, facultative and capital markets, Aon Benfield is redefining the role of the reinsurance intermediary and capital advisor. Through our unmatched talent and industry-leading proprietary tools and products, we help our clients to redefine themselves and their success. Aon Benfield offers unbiased capital advice and customized access to more reinsurance and capital markets than anyone else. As a trusted advocate, we provide local reach to the world’s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial, and rating agency advisory, and the right professionals to advise clients in making the optimal capital choice for their business. With an international network of more than 4,000 professionals in 50 countries, our worldwide client base is able to access the broadest portfolio of integrated capital solutions and services. Learn more at aonbenfield.com.
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