Country Profile I - Japan - Insurance-linked securities: A seasoned alternative asset class
Source: Asia Insurance Review | Feb 2010
Insurance-linked securities (ILS), like most financial markets, were affected in many ways by the global financial disruption. Catastrophe bond issuance, however, saw a robust rebound after a
six-month impasse, and the trend sustained towards the end of 2009, demonstrating continued
value of the market. Mr Rion Sato, Investment Banking Group Leader, Aon Benfield Japan Ltd,
tells us the ILS sector will likely be gaining further momentum with a growing investor base and with new sponsors issuing in 2010. However, for the Japanese natural catastrophe risks, the ILS market has been less active for the last 18 months primarily due to broader pricing differentials with traditional reinsurance relative to the US peak zone risks where the market is most efficient.
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