Bermuda ILS Listings Exceed $70.5B as AIG Launches Parametric Cloud Cover
By The Reinsurance Daily Editorial ·
Bermuda ILS Listings Exceed $70.5B as AIG Launches Parametric Cloud Cover
Bermuda Stock Exchange Captures 95% of ILS Market with $70.5B in Listings
The Bermuda Stock Exchange (BSX) has solidified its dominance as the preferred listing venue for insurance-linked securities (ILS), with total listed volume reaching a new high of $70.5 billion. This represents a material increase from the $68.5 billion recorded at the start of the year. The exchange's market share of new catastrophe bond and ILS issuance is now 95.4%, demonstrating near-total capture of the market's primary activity. During the first half of the year alone, the BSX processed $16.5 billion in new listings from catastrophe bonds and related ILS structures. This growth underscores the jurisdiction's entrenched position in the market's core infrastructure, making it the central hub for both capital providers and sponsors seeking to transact in securitized risk.
The Bermuda Stock Exchange (BSX) has now listed over 95% of the outstanding catastrophe bond market, which stands at a new record high of more than $50 billion.
AIG Partners with Parametrix to Launch Parametric Cloud Outage Cover
AIG has entered the parametric insurance space for technology risk by launching a cloud downtime solution in partnership with specialist MGA Parametrix. The product provides pre-agreed payouts to businesses experiencing financial losses from outages of third-party cloud providers, content delivery networks, and e-commerce platforms. This move targets a rapidly expanding risk pool, with the market for outage-related losses projected to grow by 35% annually to reach $129 billion by the end of the decade. The collaboration leverages Parametrix's data monitoring and modeling capabilities to trigger policies based on objective, independently verifiable downtime events, removing the need for traditional loss adjustment. Limits available were not disclosed in the initial announcement.
Samoa Adaptation Plan Seeks Regional Catastrophe Bond
Samoa’s government has formally called for the creation of a regional catastrophe bond as a core component of its national climate adaptation strategy. The plan also advocates for the expansion of existing parametric insurance mechanisms, such as those provided through the Pacific Catastrophe Risk Insurance Company (PCRIC), to cover a wider range of perils and provide more substantial post-disaster liquidity. This signals a direct demand from a sovereign entity for more sophisticated, capital markets-based risk transfer solutions to manage the escalating financial impact of climate-related events, which have caused damages estimated at over $415 million for the nation in recent years.
Kansas Woman Sentenced for Insurance Fraud
A Kansas resident, Jennifer Tovar, was sentenced to 12 months of probation and ordered to pay $500 in restitution for a case of insurance fraud. While the individual claim amount was minor, the prosecution by the Kansas Insurance Department’s Anti-Fraud Division highlights ongoing enforcement at all levels. The Division reported recovering $1.7 million for Kansas consumers in the previous year, underscoring the cumulative financial impact of such activities. The case serves as a reminder of the persistent nature of small-scale, opportunistic fraud within the broader P&C market.
Sunstar Acquires Minnesota’s RJR Faribo Insurance Agency
Memphis-based Sunstar Insurance Group, an agency reporting over $103 million in annual revenue, has acquired RJR Faribo Insurance Agency of Faribault, Minnesota. The transaction adds RJR’s book of personal, business, and farm insurance to Sunstar’s growing national footprint, which now includes over 45 locations. This deal reflects the continued consolidation within the US agency and brokerage sector, where larger, well-capitalized platforms are systematically acquiring smaller, regional players to expand geographic reach and achieve economies of scale. Terms of the transaction were not disclosed.
Key Takeaways
- The $70.5B ILS market, now capturing 95.4% of global issuance via the Bermuda Stock Exchange, is actively seeking new perils beyond nat-cat, creating the capital backing required for AIG's new parametric cloud outage product.
- For AIG's new parametric cloud cover, basis risk is the primary underwriting concern; the downtime trigger must be meticulously calibrated to the client's actual financial loss in a market projected to grow 35% annually.
- With the Bermuda Stock Exchange now the default listing venue for 95.4% of all ILS, any regulatory shifts or fee structure changes in Bermuda will have an immediate, market-wide pricing impact on cat bond and retro programs.
- While AIG launches sophisticated parametric covers for corporate cloud risk, the formal request from Samoa for a regional cat bond highlights a growing execution gap in deploying similar risk transfer mechanisms for sovereign climate adaptation needs.
Sources
Bermuda Stock Exchange market share grows, with now $70.5bn cat bond and ILS listings — artemis.bm
AIG launches parametric cloud outage insurance working with Parametrix — artemis.bm
Samoa adaptation plan calls for regional cat bond, expansion of Pacific parametric coverage — artemis.bm
Markets/Coverages: AIG Starts Parametric Cloud Outage Solution — insurancejournal.com
Kansas Woman Sentenced to Probation for Insurance Fraud — insurancejournal.com
Sunstar Acquires Minnesota’s RJR Faribo Insurance Agency — insurancejournal.com
European Insurance and Occupational Pensions Authority — eiopa.europa.eu