Bermuda overtakes Cayman as predominant domicile for ILS vehicles


Bermuda has overtaken the Cayman Islands as the main domicile for insurance-linked securities (ILS) vehicles, according to the latest Willis Capital Markets & Advisory (WCMA) report.

The insurance-focused investment banking boutique said Bermuda now represents 67 percent of the market, compared with 18 percent in 2011. The Cayman Islands meanwhile represents 23 percent of the market currently, compared with 60 percent four years ago.

“This is a structural change,” said Bill Dubinsky, Head of ILS at WCMA .

“Since the start of the market the Cayman Islands has been the leading domicile for cat bonds. Roughly 90 percent of all cat bonds issued since the mid-1990s to 2012 were domiciled in Cayman. However, despite Cayman’s new Insurance Law in 2013, Bermuda is emerging as the preferred domicile for new ILS vehicles.

“We wait and see how this will change with the UK Treasury’s stated intention to make London a primary centre for the issuance of cat bonds and other ILS products as well as the initiatives in other jurisdictions.”

The report also found that overall there is a shifting dynamic within ILS market as catastrophe bond issuance declines. Despite this, total ILS assets under management continue to grow, albeit at a slower rate than the record breaking pace of recent years, according to WCMA. 

Willis Capital Markets & Advisory, Bill Dubinsky, ILS, Bermuda, North America

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