The catastrophe bond and related insurance-linked securities (ILS) market has reached a new all-time-high as the amount of issuance recorded across a twelve-month period to end of September 2021
A news report by artemis.bm, a leading catastrophe bonds, insurance linked securities, reinsurance capital and investment, risk transfer intelligence firm, indicated that the catastrophe bond market had been experiencing elevated levels of activity over the last year.
The surging bond issuance is linked to growing investor appetite for the more liquid and transparent forms of insurance-linked security (ILS), as well as cedents appetite for reinsurance and retrocession at the higher layers cat bonds tend to cover.
The report stated that for the twelve-months to September 30th 2021, the Artemis Deal Directory has recorded more deal-flow that in any other 12-month period since the company first began tracking this marketplace.
The report clarified: “Bearing in mind the Deal Directory has existed online since 1999, but the list of deals has been under construction since late 1996, we believe this has been a record 12-month period for the cat bond and related ILS market, unprecedented in terms of issuance.
“In total, including every transaction in our Deal Directory, so 144a property catastrophe bonds, life/health/specialty lines cat bonds, private cat bonds and mortgage ILS deals, the 12-month total issuance to end of September reached a stunning $21.9 billion of risk capital.
“Subtracting the mortgage ILS deals we’ve recorded, which at $7.12 billion was also a rolling 12-month issuance record to the end of Q3, the total falls to $14.73 billion which is also a record.
“That $14.73 billion of issuance, during a rolling 12-month period and including 144a property cat bonds, private cat bonds and life/health/specialty lines cat bonds, is well ahead of previous records, thanks to the pace of issuance seen in 2020 and 2021 so far.
“If we subtract the almost $735 million of private cat bonds and $570 million of life/health/specialty lines ILS in cat bond form that we’ve recorded, leaving just pure Rule 144a property catastrophe bonds, we still get a rolling 12-month issuance figure of over $13.4 billion, which is again a record-high”, Artemis added.
The report further noted that the market surge bodes well for the full-year 2021 issuance, which Artemis had recently predicted held the potential of setting a new record high.
The company maintained: “Focus on catastrophe bonds and the higher-layer, more liquid, more transparent, cat bond structured deals, remains high and brokers’ are forecasting a strong end to the year ahead.”
