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Cayman 'number one' for catastrophe bonds

Published on Wednesday, July 21, 2010 Email To Friend    Print Version

Cayman Finance chairman, Anthony Travers, OBE.

NEW figures have revealed the Cayman Islands are the leading offshore jurisdiction for listed catastrophe bonds, with more than 7.7 billion dollars in bonds now listed on the Cayman Islands Stock Exchange, according to information from Cayman Finance.

Cayman Finance chairman, Anthony Travers, OBE, said the latest figures emphasise the extraordinary growth in this sector since 2007 when the very first cat bond was listed in Cayman.

Mr Travers also stated that the figures demonstrate just how adaptable the Cayman Islands financial services industry has been in taking the structured finance model and providing a new form of insurance-related product.

Catastrophe bonds bring a broad range of benefits to insurers and insureds on a global basis by increasing the pool of funding and reducing insurance costs to end users.

Adding that he was “somewhat unclear’’ about the basis for recent Bermudian claims regarding cat bonds, Mr Travers also highlighted the statistics that showed Cayman has 74 series of catastrophe bonds listed with a value of 7.7 billion dollars whilst Bermuda has just 10 bonds listed with a value of 1.1 billion dollars.

Mr Travers said: “When you consider that the first cat bond was only listed in April 2007 it has been a great success story for Cayman and the Cayman Stock Exchange, particularly since Bermuda has in the past had the leading position in insurance-related products.

“These are fully regulated and transparent structures and, contrary to the misperceptions that still persist amongst a hard core of left-leaning European bureaucrats, are quite typical of the well-structured financial products that are attracted to an offshore financial centre like the Cayman Islands precisely because of the quality of its legal and regulatory regime.”

The news about cat bonds comes shortly after figures emerged on the increasing number of hedge funds that are now registering in Cayman. Over 100 new funds are being registered each month.

The Cayman Islands are on track for more than 10,200 registrations by financial year end.

“This will exceed the all-time high watermark for the Cayman fund industry,” added Mr Travers.

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