ILS reaches five-year high

According to Aon Benfield’s latest review of the global ILS market, a strong fourth quarter in 2012 resulted in a five-year high for the market, with issuance reaching $6.25 billion by the close of the year.

Strong bond issuance for the fourth quarter of 2012, totalling $1.89 billion, resulted in the most active ILS market since pre-crisis 2007. Issuance increased 35 percent on 2011 levels, with significant issuances such as Compass Re and Everglades Re helping to drive interest in 2012.

Full-year results were also impressive for Aon Benfield’s All Bond index, which posted annual returns of 9.9 percent, a 6.7 percent increase on the previous year. Results compare favourably to benchmarks, including the 3-5 year US Treasuries notes, which recorded an annual return of 1.6 percent and ABS 3-5 Year, Fixed Rate, which recorded an annual return of 6.4 percent in 2012.