Asian ILS Brings Hong Kong Cat Bond Listing to Bermuda – The Royal Gazette


Updated: 11/02/2021 8:02 AM

The head of the Bermuda Stock Exchange has praised the importance of listing Hong Kong’s first catastrophe bond.

The $ 30 million Greater Bay Re Ltd, 2021-1 Series, Cat Bond protects against typhoon losses in the Greater Bay region and other high typhoon vulnerability areas in China.

The Territory’s first cat bond insurance-linked security issue was provided by China Reinsurance (Group) Corporation and government-backed China Property and Casualty Reinsurance Company Ltd through Greater Bay Re, the first authorized specialist company. Purpose insurer in Hong Kong.

Greg Wojciechowski, President and Chief Executive Officer of BSX, said, “The listing of Greater Bay Re is a really significant development for us. We have had great success in supporting Bermuda and worldwide domiciled securities.

“Investors feel good when their securities are listed on the BSX, as Bermuda and the BSX are well-established and known as a reputable jurisdiction and well-regulated international stock exchange.

“We are pleased that this issuer has chosen Bermuda because we have supported their products in the past and it shows that they continue to choose Bermuda.”

By the end of the third quarter, BSX had listed 210 ILS securities that year with an outstanding market capitalization of $ 15.4 billion.

Of the 1,259 securities listed on the BSX at the end of the quarter, 719 were ILS vehicles with an outstanding market capitalization of $ 50.2 billion – or 95 percent of global issues, Wojciechowski said.

He added, “Bermuda has developed a deep bank to support this unique and important asset class that provides recreation and resilience to communities around the world.

“The island continues to offer professional services for a global clientele.”

The Insurance Authority, Hong Kong’s independent insurance regulator, welcomed the first edition of an ILS.

IA Chief Executive Officer Clement Cheung said, “This decision by a leading government reinsurer not only illustrates the potential and appeal of Hong Kong as an emerging ILS hub, but also demonstrates our critical role as a global risk management center.”

The IA said the increasing frequency and intensity of extreme weather events coupled with rapid urbanization in the Asia-Pacific region make ILS an effective tool for reducing the risk of natural disasters.

A very volatile market environment also increases the appetite of institutional investors for products that are less correlated to economic cycles.

The IA said the Chinese central government has announced a number of policy measures, including helping mainland insurers to issue catastrophe bonds in Hong Kong.

Mr. Cheung added, “By taking full advantage of the explicit support of the central government, we will intensify our efforts to foster a dynamic ILS ecosystem and do our part to increase underwriting capacity, improve financial resilience and reduce protection gaps. “

The IA said the issue was made possible by a bespoke and streamlined regulatory system for SPIs it launched in March.

It added that the scheme was complemented by the pilot ILS grant program announced in China’s 2021-22 state budget, which subsidizes up-front costs of up to HK $ 12 million (approximately $ 1.54 million) for each eligible transaction.

Greg Wojciechowski, President and CEO of the Bermuda Stock Exchange (file photo)

ILS Ambitions: Hong Kong (file photo)


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