Japan earthquake-exposed cat bonds trade lower in 2011 Q1

Several catastrophe bonds with exposure to the Japanese 2011 earthquake and tsunami have traded lower in the 2011 first quarter, according to Aon Benfield Securities’ latest Insurance Linked Securities (ILS) report. The Aon Benfield ILS All Bond Index posted a negative 2% return in 2011 Q1, compared to a positive 3.4% return for the same period in 2010.”Catastrophe bonds will continue to be an important source of risk transfer capacity for U.S. perils, and potentially more important for non-U.S. risks given recent global events,” said Paul Schultz, president of Aon Benfield Securities.