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Record Growth For Guernsey's 'Cat Bond' Market

by Amanda Banks, Lowtax.net, London
02 June, 2017

Guernsey's catastrophe bond and insurance-linked securities (ILS) market has experienced record growth, according to recently released statistics.

Catastrophe bonds were first issued in the mid-1990s and transfer a specific set of risks (generally catastrophe and natural disaster risks) from an issuer or sponsor to investors. Investors assume the risks of a specified catastrophe or event occurring in return for an attractive investment return.

The first quarter of 2017 saw 14 global transactions with USD2.76bn of risk capital issued – approximately USD1.4bn above the 10-year average. The outstanding market size of USD27.19bn is roughly USD377m higher than at the end of 2016.

Guernsey is the birthplace of captive insurance products like the protected cell company, and is now also a leading destination for ILS with the number of locally domiciled insurance entities growing from 804 to 835 by the end of 2016, a substantial year-on-year increase largely attributable to growth in the ILS market.


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