Catastrophe Bond Market Hits Target, Records Possible in 2010

Filed under: Deals, Good news, Competitive strategy, Goldman Sachs Group (GS)

The end of a year means a rush of data from the insurance and reinsurance industries, as treaties are renewed for the coming year. Catastrophe bonds are a part of this annual orgy of data production, as a flurry of activity occurs in December, with the industry's commitment to this form of alternative property-catastrophe risk-transfer setting the tone for the year to come. The cat bond market isn't big enough to push reinsurance rates, but you can generally get a sense of what the coming year will look like for cat bonds based on pricing for traditional reinsurance.

Last year, the cat bond market recovered from six nearly silent months at the end of 2008, with approximately $3.4 billion issued. From the beginning of 2009, forecasts were for a $3 billion issuance year, which seemed aggressive given the turmoil visited upon structured financial products and lower than expected reinsurance rate increases a year ago (which made cat bonds seem less necessary).

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Catastrophe Bond Market Hits Target, Records Possible in 2010 originally appeared on BloggingStocks on Mon, 04 Jan 2010 17:45:00 EST. Please see our terms for use of feeds.

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