AIR Worldwide on Monday announced it has provided risk modeling and analytical services for more than $25 billion in 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. This 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,” says Rob Newbold, senior vice president at AIR Worldwide, in a statement. (Editor’s Note: Zenkyoren is the National Mutual Insurance Federation of Agricultural Cooperatives in Japan.) “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,” Newbold says.

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 Verisk Catastrophe Index as the trigger mechanism.
  • 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 limits—a figure that included the first ever catastrophe bond. Since reaching that milestone, companies have continued to look to AIR to provide the risk assessment for their securitizations, the modeling firm said.

In addition to providing risk modeling services for catastrophe bond issuances, investors can use AIR’s CATRADER to analyze and manage 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.

Source: AIR Worlwide