This is sweet business. The insurers and re-insurers will be raising premiums as fast as they can blame the Tohoku earthquake* or, in the case of Munich Re, global warming/colding. At the same time they are getting rid of the risk by selling cats.
Strong investor demand and attractive market conditions resulted in a record first quarter of 2011 for catastrophe bond issuance said Willis Capital Markets & Advisory (WCMA) in their recently published Q1 cat bond market report. $1 billion of catastrophe bonds were issued during Q1 2011 compared to $650m in the same quarter last year.*It was ever thus. From a Mar. 2010 post:
The first quarter has historically been fairly quiet, with not many cat bonds issued. The first three months of 2011 saw just four new cat bonds issued by regular market participants, however the demand from investors saw some upsize helping the total issuance reach $1 billion. All four of the deals (which you can read more on in our catastrophe bond Deal Directory) have some exposure to U.S. hurricane risks, The Hartfords $135m Foundation Re III issuance was solely a U.S. wind deal while the other three issuances were multi-peril. Chubb returned to the market to issue the East Lane Re IV cat bond which was the largest deal of Q1, raising $475m....MUCH MORE
A brisk breeze gets the boys in Omaha, Zurich, Munich and London (Lloyds) talking about premium increases.
Not to mention the herverzekering crowd in Amsterdam, they're tough bastards....