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PERILS-based transactions up 40 pct yr/yr to $3.5 billion
September 13, 2012 / 5:06 PM / 5 years ago

PERILS-based transactions up 40 pct yr/yr to $3.5 billion

LONDON, Sept 13 (Reuters) - Transactions in insurance-linked securities (ILS) products for European windstorm risk increased by 40 percent to $3.5 billion in the year to Sept 1, loss and exposure data aggregator PERILS said on Thursday.

The total included $1.96 billion of capacity via catastrophe bonds and $1.56 billion in industry loss warranties (ILWs) and derivatives, the Zurich-based company said.

Cat bonds using PERILS data are set up by insurers and reinsurers requiring an extra layer of protection against European windstorm risk, and are seen as an alternative to reinsurance.

Catastrophe bond issuers make regular interest payments to the bondholders. They return the principal once the notes expire but in the event of major catastrophe-related claims, the insurer uses the proceeds of the bond sale to absorb some of its losses.

Loss estimates by PERILS have been used as the index base in all the main forms of industry loss-based insurance risk transactions - similar to the Property Claims Service (PCS) data now widely used in the United States.

PERILS was launched in December 2009 by insurers Allianz, AXA, Groupama and ZFS; reinsurers Munich Re , PartnerRe Ltd; Swiss Re ; and reinsurance broker Guy Carpenter.

Since the Industry Loss Index Service was introduced, a total of more than $5.4 billion of limits has been placed thorugh more than 70 transactions using PERILS data, the firm said.

“The PERILS industry loss index has firmly established itself as the industry loss trigger of choice for transferring European storm risk to reinsurers and capital markets,” Eduard Held, head of products of PERILS said in a statement.

PERILS launched a new flood data service on Monday, which provides real-time images of flood damage during and after major flood events.

To join the Thomson Reuters Insurance Linked Securities Community for more news and analysis, click here Reporting by Sarah Mortimer; editing by Jason Neely

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