Insurance-linked securities: First quarter 2014 update

As 2013 came to a close, total new catastrophe bond issuance for the trailing 12-month period was at its highest level since 2007, while total bonds outstanding at year end set a new record of USD20.3 billion.

Picking up where the strong 2013 year ended, seven transactions closed during the first quarter of 2014, making it the second most active for any first quarter on record. Meanwhile, market conditions for insurance linked-securities ("ILS") followed the historic low rates seen in 2013, as strong demand for catastrophe bonds continued among sponsors and investors.

New sponsors, American Strategic Insurance Group ("ASIG") and Great American Insurance Company ("GAIC'"), entered the market in the first quarter, along with ILS veterans State Farm, Munich Re and Chubb Group.

Investors were provided with a variety of risks to choose from, including regional U.S. earthquake, regional, nationwide and North American multi-peril, Japanese earthquake, worldwide hurricane and cyclone, and U.S. health.