George Town Re silver jubilee – $135bn of catastrophe bonds tracked

George Town Re silver jubilee – $135bn of catastrophe bonds tracked

This December marks the 25th anniversary, or silver jubilee, of the issuance of a landmark disaster bond transaction, the George Town Re Ltd. deal, given that when Artemis has tracked practically $135 billion of cat bond issuance.The George Town Re Ltd. disaster bond, which came to market in December 1996, is often thought about the very first true, extensively syndicated, feline bond transaction, so features heavily in the memories of much of those associated with the insurance-linked securities (ILS) market given that its creation.
While Artemis did not actually exist at the time the George Town Re feline bond was released, the Artemis Deal Directory did, but as a single page of another insurance and reinsurance market focused web portal that I handled at the time.
There, I started to gather information on and details of every catastrophe bond issuance I might glean details on, with that single page ending up being the basis for Artemis launch in early 1999.
Twenty-five years after I started this collection of ILS market information, cumulative issuance of disaster bonds (consisting of Rule 144A property feline bonds and cat bonds covering life, health, specialized, or other lines of insurance coverage and reinsurance company, along with some personal cat bonds), has actually now reached an unbelievable almost $135 billion.

The George Town Re cat bond did not have the simplest trip over the life of its coverage and in the end a small, less than $1 million payout was made to its sponsor St Paul Re, after a variety of catastrophe occasions triggered the deal to be triggered.
The triggering of George Town Re came about after 1999s Hurricane Floyd, in addition to European Windstorms Anatol, Lothar and Martin, along with impacts from the 2000 UK Floods, and the 2001 attack on the World Trade Centre.
George Town Re was not typical of catastrophe bonds seen today, given its quota share nature of the underlying reinsurance, plus its structure and absence of what we d call a coupon today.
But, as the extremely first cat bond noted in the Artemis Deal Directory and one we tracked through to issuance at the time in 1996, its certainly unforgettable for us and for those others active in the insurance-linked securities (ILS) space at the time.
In overall weve tracked the issuance of more than 800 disaster bonds and similarly structured ILS deals in our Deal Directory over the twenty-five year period, of which around 760 comprise the $135 billion of cumulative issuance detailed in our chart (as it omits mortgage ILS and a couple of other reinsurance securitization transactions).
With disaster bond issuance once again setting records in 2021 and the market anticipating a busy 2022 as well, its completely possible cumulative issuance might near the $150 billion mark by the end of next year.
The George Town Re disaster bond began a fascination with making use of monetary market innovation to enable the transfer of insurance coverage and reinsurance related risks to capital market financiers in a type that could be assumed more quickly by their requireds and funds.
While issuance of $135 billion over the twenty-five years since George Town Re is excellent, we still believe that as technology improves, issuance expenses come down and monetary market securitization ends up being more easily possible, that the next twenty-five could see a far greater volume of issuance.
Pleased Christmas everyone and best want the New Year ahead!
Access all of our charts breaking down the disaster bond and related insurance-linked securities (ILS) market here.

Leave a Reply

Your email address will not be published.

error: Content is protected !!