A record $ 11.3 billion in new insurance links were issued in 2020 over 49 transactions, according to a report Monday from Swiss Reinsurance Co. Ltd.
The market also saw more issuers as the number of sponsors in 2020 jumped to 38 from 21 in 2109, including nine new sponsors, and a transition to individual risk bonds, Swiss Re said, adding that the market did not see activity fall sharply due to the pandemic. the months of March to May 2020 ”after a short hiccup in March when some investors managed liquidity issues, said Swiss Re. earthquakes reported by Property Claims Services Inc .; Convex Group Ltd. with Hypatia 2020-1, which covers all named storms or North American earthquake events reported by PCS; and the Los Angeles Department of Water & Power, with its Power Protective Re Ltd. 2020-1
Individual hazardous bonds, those that cover only an exposure such as US wind, accounted for 62% of the 2020 issue, an increase from 53% in 2019, as the number of bonds in multiperil decreased to 38% in 2020 from 47% in 2019, Swiss Re- tasks.
According to a separate comment from financial analyst Jeffries Group LLC, emergency bonds and side cars exceeded reinsured collateral and served the investors' "service". The decline in security for reinsurance capacity is expected to continue in 2021, which "should strongly support reinsurance and retrocession rates in the coming renewals," Jeffries said.