Insight and Intelligence on (Re)insurance Convergence with the Capital Markets

19 May 2012

Cold spot ILW market grows to $170mn on second NZ quake

4 March 2011

Almost $50mn of additional "cold-spot" industry loss warranties (ILWs) have traded in 2011 in the wake of losses in Australia and New Zealand, Trading Risk has learned.

Although brokers declined to comment on the size of the market, it is believed volume has increased by roughly one third since 1 January, rising to about $170mn from $125mn last year.

Cold spot ILWs are reinsurance derivative contracts that trigger on industry loss estimates for non-peak risks.

In a reversal of their...

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