Willis Towers Watson Securities ILS Market Update: Reloaded and ready

LONDON, April 26, 2018 -- Far from recoiling from loss events in 2017, ILS investors are reloaded and ready for the 1 June 2018 Florida renewals. Meanwhile outstanding capacity under catastrophe bonds is greater than ever according to the latest ILS Market Update from Willis Towers Watson Securities, the investment banking business of leading global advisory, broking and solutions company, Willis Towers Watson (NASDAQ:WLTW).

The first quarter of 2018 saw $3.1 billion of underwritten, widely-distributed non-life ILS capacity issued through twelve catastrophe bonds, compared to $1.7 billion through five bonds in the same quarter of 2017. It marks the largest-ever first-quarter issuance in the history of the non-life ILS market, and the third-highest quarter ever.

$26.6 billion of non-life capacity was outstanding at the end of the quarter, up $1.1 billion to a record high. Most were market-diversifying transactions, including bonds for first-time sponsors Chile, Colombia, and Peru, and by repeat Japanese cedants Zenkyoren, Mitsui Sumitomo Insurance, and Tokio Marine & Nichido Fire.  As a result of this diversifying issuance, only 63% of outstanding capacity is exposed to U.S. Wind, the lowest in the last ten years.

William Dubinsky, Managing Director and Head of ILS, said: “We expect the current trends in ILS growth to continue. Without a true surprise loss, like an ice-storm in Miami, end-investors will continue to allocate capacity to ILS. Yield increases under government bonds are expected to be neutral or maybe even slightly positive for issuance and asset growth, and even more importantly, we will continue to see a trend towards true syndication, reducing the power of large leading markets. All this will put the reinsurance market’s traditional pricing cycle on life support.”

Download the Willis Towers Watson Securities 2018 Q1 ILS Market Update

ABOUT WILLIS TOWERS WATSON SECURITIES 
Willis Towers Watson Securities, with offices in New York, London, Hong Kong and Sydney, provides advice to companies involved in the insurance and reinsurance industry on a broad array of mergers and acquisition transactions as well as capital markets products, including acting as underwriter or agent for primary issuances, operating a secondary insurance-linked securities trading desk and engaging in general capital markets and strategic advisory work. Willis Towers Watson Securities is a trade name used by Willis Securities, Inc., a licensed broker dealer authorized and regulated by FINRA and a member of SIPC (“WSI”), Willis Towers Watson Securities Europe Limited (Registered number 2908053 and ARBN number 604 264 557), an investment business authorized and regulated by the UK Financial Conduct Authority (“WTW Securities Europe”) and Willis Towers Watson Securities (Hong Kong) Limited, a corporation licensed and regulated by the Hong Kong Securities and Futures Commission (“WTW Securities (HK)”).

ABOUT WILLIS TOWERS WATSON
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential.

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