LONDON Jan 29 Sales of catastrophe bonds, used
by insurers as a way of selling on their exposure to natural
disasters, are close to levels last seen before the financial
crisis, new data shows.
A flood of capital from pension and hedge funds, drawn by
5-7 percent yields for many so-called "cat bonds" when more
traditional assets pay rock bottom rates, has driven down prices
and hurt profitability for reinsurers.
Figures from insurance broker Willis published on
Wednesday show total issuance during 2013 reached $7.1 billion,
close to the $7.2 billion record reached during 2007.
The competition from such alternative sources of capital -
once the preserve of specialist money managers -is blamed for
pushing reinsurance prices down by more than a fifth in the
lucrative market for hurricane coverage in the United States.