March 12th, 2014

Catastrophe Bonds 4th Quarter 2013, Maturities and Risk Capital

Posted at 1:00 AM ET

Catastrophe bond issuance in the fourth quarter of 2013, USD1.82 billion, was minimally offset by the limited amount of catastrophe bond maturities of USD360 million, resulting in a net change of risk capital outstanding of USD1.46 billion.

Recent and upcoming scheduled maturities by peril are shown in Table 1 below. Significant capital will be available as a result of an above average volume (based on principal amount) of maturities scheduled for the first and second quarters of 2014, which should result in a sponsor-friendly environment as investors look to redeploy capital quickly.

Table 1


As a result of the positive net change in risk capital outstanding, total risk capital outstanding at the end of 2013 reached an all-time high of USD18.58 billion, which is an estimated 16 percent of global property catastrophe limit purchased annually. Given the large amount of scheduled maturities in the first quarter of 2014, risk capital outstanding may decrease until new catastrophe bond issuances occur in 2014.

Figure 2 chart-2_web

Note: 1.   Source: GC Securities Proprietary Database (P&C catastrophe bonds as of December 31, 2013 excluding private transactions)

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Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office:  1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS.  Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC.  MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies.  This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

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