Aon Benfield Securities is responding to the rapidly growing insurance linked securities (ILS) market by launching CATstream – a new client facility that it says offers cedants faster and more efficient access to capital markets capacity for catastrophe risk.
The company, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, said that CATstream’s template documentation and pre-agreed wordings enable catastrophe bonds to be established in less than half the time of typical non-standardised products. With faster access to capital markets capacity, cedants can take advantage of additional risk transfer capacity in note form.
CATstream currently allows for the domiciliation of special purpose insurers (SPIs) – the vehicles utilised in the structuring of catastrophe bonds – in Bermuda and Ireland.
Aon Benfield Securities added that the streamlined documents developed for CATstream have been reviewed and approved by the associated service providers and regulators, enabling transactions to be brought to market more quickly and with lower frictional costs.
CATstream can be used to structure transactions with index and indemnity trigger structures that relate to a broad range of perils and territories, allowing clients to enjoy capacity diversification, multi-year capacity and multi-year known pricing.
“We are launching CATstream at a time when the ILS market is showing continued strength; where sponsor and investor demand for ILS products is at an all-time high,” said Paul Schultz, chief executive officer (CEO) of Aon Benfield Securities.
“We believe that this facility can only promote the growth of the market, by enabling sponsors to secure capital markets coverage within a short timeframe for the structuring of products in strong and proven domiciles at lower frictional costs.”
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