New York, NY, April 12, 2011 – Attractive market conditions as a result of strong investor demand resulted in a record issuance of USD 1 billion catastrophe bonds in the first quarter of 2011 in comparison with USD 650 million in the same quarter last year. This is according to the latest Insurance-Linked Securities (ILS) Market Update from the boutique investment banking arm of Willis Group Holdings (NYSE: WSH), the global insurance broker.
The quarterly report titled, "The Market Digests a Major Catastrophe Event", is produced by Willis Capital Markets & Advisory (WCMA), an adviser to (re)insurance companies on capital markets products and mergers and acquisitions.
WCMA stated that the full impact of the Japan earthquake on pricing for new cat bond issues remains unclear, but said that it expects some upwards pressure on risk premium levels for Japan earthquake risks going forward. The report found that at the beginning of the quarter, there was downward pressure on risk premium levels driven by cash inflows into specialist cat funds.
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