Cayman Islands Top For Catastrophe Bonds

by Phillip Morton, Investors Offshore.com

09 August 2010

New figures have revealed the Cayman Islands are the leading offshore jurisdiction for listed catastrophe bonds. More than USD7.7bn dollars in bonds have now been listed on the Cayman Islands Stock Exchange.

Cayman Finance chairman, Anthony Travers said the latest figures emphasized the extraordinary growth in this particular sector since 2007 when the very first catastrophe bond was listed in Cayman. Travers observed that the figure demonstrates 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 several benefits to insurers and the insured alike, namely by increasing the pool of funding and reducing insurance costs.

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

The Cayman Islands are on track for more than 10,200 total registrations by the end of this financial year. “This will exceed the all-time high watermark for the Cayman Fund Industry,” Travers noted.

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