January 2014/1

Deutsche Bank has traded with an ILS fund for the first transaction that uses its Longevity Experience Option (LEO), a template for longevity options launched in November, Trading Risk can reveal.

Average premiums in the ILS and industry loss warranty (ILW) market continued to tumble in 2013, falling during the fourth quarter to levels last seen in 2005, according to broker-dealer Lane Financial.

American International Group (AIG) achieved a significantly broader distribution of its second Tradewynd Re cat bond after providing extra exposure information to allow multiple agencies to model the deal, the insurer's chief reinsurance buyer Samir Shah told Trading Risk.

A trio of public cat bonds raised almost $500mn in the last two weeks of December, taking total 2013 issuance to $7.64bn, as pricing pressure continued in the final marketing rounds of the year.

Collateralised retro provider Catco has shifted its risk profile down for 2014 in response to changing market conditions that have led to decreased demand from some buyers.

All the kerfuffle at last year's Monte Carlo Rendez-Vous about allegedly naive capital and declining cat bond premiums seems quite ironic now that the January renewals are behind us.

Hedge fund-backed collateralised reinsurer DE Shaw pulled back its participation in the January 2014 renewals as retro rates fell, Trading Risk understands.

The cat bond market can expect new issuance of between $7bn-$8bn in 2014, according to a survey of major ILS broker-dealers conducted by Trading Risk.