PERILS Enters the Market with ILW Issue
Dec/17/2009 10:34 AM Filed in: Catastrophe Bonds
The use of the index in catastrophe bonds is expected soon.
PERILS AG’s use in two industry loss warrants (ILW) announced today is likely the first step to its broader adoption into catastrophe bonds, says an industry professional.
“I think this is a question of the market getting familiar with the product. I can seem them used in catastrophe bonds in 2010,” says Henry Kingham, executive director with Willis Re in London.
Earlier today Zurich-based PERILS announced that its industry loss index had been chosen for inclusion in two new ILW reinsurance contracts offering protection from European windstorm losses.
This the first time that data from PERILS -- an industry-owned service -- has been used in a capital market structure since it was created earlier this year.
The first contract involves Credit Suisse Asset Management as the protection provider and Munich Re as the counterparty. The second vehicle was arranged by Willis Re. Each will provide protection against a major European windstorm event.
PERILS declined to name the counter-parties for the Willis Re arrangement, as well as the amounts of each ILW.
Kingham says that the ILS market has been “crying out” for a independent index for European loss events and that the next twelve months will see significant activity for PERILS.
“The big European [insurers] will watch these initial steps closely, but once they are familiar with [PERILS] the market will welcome it,” Kingham says.
“I think this is a question of the market getting familiar with the product. I can seem them used in catastrophe bonds in 2010,” says Henry Kingham, executive director with Willis Re in London.
Earlier today Zurich-based PERILS announced that its industry loss index had been chosen for inclusion in two new ILW reinsurance contracts offering protection from European windstorm losses.
This the first time that data from PERILS -- an industry-owned service -- has been used in a capital market structure since it was created earlier this year.
The first contract involves Credit Suisse Asset Management as the protection provider and Munich Re as the counterparty. The second vehicle was arranged by Willis Re. Each will provide protection against a major European windstorm event.
PERILS declined to name the counter-parties for the Willis Re arrangement, as well as the amounts of each ILW.
Kingham says that the ILS market has been “crying out” for a independent index for European loss events and that the next twelve months will see significant activity for PERILS.
“The big European [insurers] will watch these initial steps closely, but once they are familiar with [PERILS] the market will welcome it,” Kingham says.
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