October 2013/1

Swiss Re's second issuance of contingent write-off notes has closed at a size of SwF175mn ($193.6mn) after pricing in the middle of initial guidance, Trading Risk understands.

Strong investor demand in September and October helped boost the size of a trio of diversifying cat bonds to $960mn from a cumulative target of less than $550mn, taking total issuance for the year to date to $6.2bn.

Reinsurance premiums are still within the range of investor expectations from the ILS asset class even if the market has softened to the lower end of this range, Towers Watson investment consultant Todor Todorov said.

Baillie Gifford, TIAA-CREF and Pioneer Investments are among the key institutional investors that have increased their involvement in the ILS market over the past year, according to sources.

The (re)insurance industry is normally vigilant about reminding regulators that they're not banks - dodging the AIG elephant in the room to point out that they got through the crisis fine, thank you very much, and hands off our balance sheets please.

A good amount of work is already underway for early January reinsurance renewals as buyers seek to lock in favourable pricing and place significant limit outside the subscription market.

Swiss Re has significantly expanded its Sector Re sidecar over the past year, Trading Risk understands, with sources suggesting that it has roughly doubled in size to $500mn-$700mn.