September 2014 50 Bermuda:Re/insurance+ILS
Speed and simplicity ensure further success for ILS
Bermuda:ILS
CATstream, Aon Benfield Securities’ latest facility focused on the cat bond market, promises to deliver expedited and simplified transactions to clients. Paul Schultz of Aon Benfield Securities talked to Bermuda:Re about its potential.
been strong over the past 18 months, there is potential for still further issuance, particularly among smaller and mid-sized cedants.
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Issuance hurdles associated with transactional time and cost have acted as an impediment, but as the market has grown so too has more broad-based interest in the potential of the cat bond market. CATstream aims to satisfy this growing demand.
As Paul Schultz, CEO of Aon Benfield Securities explained, CATstream was launched to satisfy client demand to “broaden access
he cat bond market continues to grow apace, with first half issuance reaching $4.5 billion, according to figures from Aon Benfield Securities, and continued strong interest from cedants and investors alike. But while growth has
to the cat bond market”. It aims to enable cedants that could not previously justify a stand-alone issuance, or were reluctant to go down the path of negotiating all their own documentation to access the cat bond market in an expedited and simplified manner.
“Some clients are more comfortable with the traditional reinsurance market due to their familiarity with traditional solutions and the speed of inception of transactions. Our intention was to create a standardised set of documents that clients can use to enter the cat bond market more easily, enabling them to bring transactions to market faster and close transactions sooner—all within a simplified framework,” he said.
Schultz said that the CATstream product would likely prove attractive to a range of clients, from small and medium-sized
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