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The global insurance-linked security (ILS) sector continued to grow in 2015, with 49 ILS transactions completed during the year, a new market high.
According to figures published by Artemis, the Bermuda (re)insurance market benefited from this booming industry, with 75% of ILS transactions completed in 2015 taking place in Bermuda. Additionally, according to reports by the Bermuda Stock Exchange, 67% of all ILS transactions completed in 2015 were listed in Bermuda.
Appleby Bermuda, which has played a significant role in the ILS sector in recent years, continued to consolidate its presence in the ILS market. In particular, Appleby Bermuda acted on over two-thirds of Bermuda's ILS transactions, including the majority of Bermuda's collateralised reinsurance (or 'cat bond lite') transactions.
Appleby has seen a marked increase in the use of collateralised reinsurance programmes in recent years. Such programmes (which are often bespoke reinsurance structures that utilise an SPI or a more traditional 'transformer' vehicle, often with segregated accounts) offer sponsors a faster, more cost-effective access point to the ILS market, particularly when compared with more traditional cat bond transactions.
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