The concern was all the excess capacity (capital) in the insurance and reinsurance industry that companies were trying to deploy in the face of a potentially nasty hurricane season.
As we saw in the post immediately below, "Insurance: Accuweather Calls for Wild Hurricane Season (AIG; ALL; BRK.B; CB; TRV)" this season could be one of the ten worst in the last 160 years.
Insurance companies can read maps too. Here are some recent headlines:
May 14 Wall Street Journal: Chartis Obtains $425 Million of Reinsurance Coverage; Fully Collateralized through Catastrophe Bond Issuance by Lodestone Re
(increased from $250 mil.)
May 7 Reuters: Allianz launches third offering in U.S. catastrophe bond
May 4 Insurance ERM: Sixth cat bond launched as US hurricane season looms
May 3 Business Insurance: Nationwide, Munich Re market catastrophe bonds
As the Reuters piece mentions:
...CATS IN PIPELINE
Four cat bonds have closed in 2010 so far, each contributing to a total of $800 million in issuance. First time issuer, Assurant's Ibis Re II, closed at $150 million last week, following The Hartford's $180 million Foundation Re III, Swiss Re's, $120 million Successor X and State Farm's $350 million Merna Re II.
Currently four more cat bonds are being marketed to investors. On April 19 S&P assigned its 'BB-' rating to Munich Re's U.S. hurricane catastrophe bond Johnston Re Ltd, while Chartis, formerly known as AIU Holdings, is also marketing its first catastrophe bond issuance for its National Union Fire Insurance subsidiary in the U.S....
The reinsurers are trying to offload their risk as fast as they can.