MONTE CARLO, Monaco & BOSTON, Sept. 9, 2013 – AIR Worldwide (AIR) today announced it has provided risk modeling and analytical services for more than $25 billion in total catastrophe bond issuance, encompassing more than 115 transactions since the market’s inception in 1996. Since the start of 2009, AIR has modeled more than $15 billion in catastrophe bond issuance, including 17 of the 22 property-based bonds issued to date in 2013. AIR’s strong presence in the catastrophe bond space this year follows an equally active 2012, when AIR was selected as the modeling agent for 24 out of 25 property catastrophe bond issuances.
“This significant milestone is marked by the September closing of the Nakama Re Ltd. catastrophe bond issuance, which provides $300 million of earthquake cover for Zenkyoren in the sponsor’s first ever indemnity-triggered catastrophe bond,” said Rob Newbold, senior vice president at AIR Worldwide. “By leveraging our vast experience working with all types of structures covering a wide variety of perils and all regions of the world, AIR continues to be the modeler of choice for companies pursuing securitization options.”
AIR has been the modeling and calculation agent for many landmark securitization transactions, including:
* the groundbreaking MultiCat Mexico 2009 Ltd., which represented a partnership between the World Bank and Mexico to help manage catastrophe risk from multiple perils;
* the “Atlas V” transaction, which was the first catastrophe bond issued after the 2008 credit crisis and one that used a hybrid trigger combining state-level PCS® industry loss estimates and AIR modeled losses by county;
* the first catastrophe bond that used the innovative Verisk Catastrophe Index® as the trigger mechanism; and
* 16 consecutive years supporting the Residential Reinsurance Ltd. Series sponsored
by USAA.
In April 2009, AIR was the first risk modeling firm to have modeled more than $10 billion in catastrophe bond limit, a figure that included the first ever catastrophe bond. Since reaching that milestone, companies have continued to look to AIR as the market leader in providing the risk assessment for their securitizations. “As the catastrophe bond industry has grown, so has the need for a trusted ally who can provide sophisticated analytics on a global scale,” said David Lalonde, FCAS, FCIA, MAAA, senior vice president at AIR Worldwide. “AIR is pleased to offer the modeling services necessary to help organizations diversify their risk transfer strategies.”
In addition to providing risk modeling services for catastrophe bond issuances, AIR’s CATRADER® is the industry standard application for analyzing and managing the risks associated with a portfolio of catastrophe bonds and other insurance-linked securities. CATRADER enables ILS investors to make informed investment decisions and better understand the impact of potential new investments on their portfolios.
Many investment firms are using CATRADER to better assess and manage the risks associated with a
portfolio of catastrophe-linked investments, including most recently Schroders, a global asset management company with £235.7 billion (EUR275.0 billion/$357.5 billion) under management as of June 2013.
“Diversification is an area of focus for us, and AIR’s CATRADER supports the analytics we use for constructing an optimal portfolio that may include catastrophe-linked instruments with a range of trigger types, including indemnity, index, and notional portfolio-based triggers,” said Daniel Ineichen, portfolio manager insurance-linked securities at Schroders. “CATRADER also makes it easy to quantify the correlations that exist across multiple catastrophe-linked investments within a portfolio, which allows us to fine-tune our desired risk/return profile.”
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 90 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, and agricultural risk management. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK) and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.
