At a turning point

A robust deal pipeline, increased activity by hedge funds and investment banks, and product innovation have all helped the natural catastrophe bond market to thrive this year. Navroz Patel investigates the reasons for these developments

This year may well come to be regarded as the time when everything began to fall into place for the catastrophe bond market. As of the start of last month, dealers estimated that a total of around $6.6 billion of catastrophe bonds had been issued year-to-date, exceeding the $6 billion figure for the same nine-month period of 2006.

But issuance volume tells only part of the story. Convinced that the market will grow strongly over the next few years, investment banks have been increasing staffing