Skip to Main Content

Cat Bond Lite Issuance Continues, 40 Percent Use PCS

Cat bond lite issuance has continued into the third quarter. The latest transaction, index-triggered Dodeka III, brings the year’s total to $242 million according to Sponsors have completed ten cat bond lites this year across three platforms.

Forty percent of this year’s cat bond lite activity uses the PCS Catastrophe Loss Index, representing 36 percent of the capital raised. Two use indemnity triggers, and one uses a parametric trigger. Details for the remaining three cat bond lites remain undisclosed. Indemnity trigger use accounts for 17 percent of capital raised, with parametric trigger use at 13 percent. Thirty-four percent of the capital raised comes from cat bond lites for which details have not been revealed.

The average size of a cat bond lite this year is $24.2 million, lifted in part by a $50 million transaction for which few details are available. Details for the smallest of the year ($7 million) are also undisclosed.

With the annual Rendez-Vous de Septembre fast approaching, cat bond lite activity is likely to be on the agenda as the insurance-linked securities community evaluates the tools available for risk and capital management.

Joe Louwagie

Joe Louwagie is assistant vice president, Property Claim Services (PCS). PCS is a Verisk Analytics (Nasdaq:VRSK) business.

You will soon be redirected to the 3E website. If the page has not redirected, please visit the 3E site here. Please visit our newsroom to learn more about this agreement: Verisk Announces Sale of 3E Business to New Mountain Capital.