Catastrophe bond and related insurance-linked securities (ILS) issuance has already broken the first-half year record at $10.9 billion, beating the previous high set in H1 2023 by around $600 million, with June issuance still to complete and add to the total, Artemis has reported.
Artemis noted that Catastrophe bond issuance had been significant so far in 2024, and after a record first quarter for the marketplace, issuance so far in the second quarter has already pushed H1 2024 issuance to new heights.
The firm projected that later this week, H1 2024 issuance would surpass $11 billion, and with numerous deals scheduled to complete before the end of June, it’s on-track to beat the previous H1 record of $10.3 billion by a significant amount.
The promising outlook of the cat bond market was based on data from the Artemis Deal Directory and the publication’s range of interactive cat bond market charts..
This is even as the size of the outstanding catastrophe bond and related ILS market had reached a new high of more than $48.7 billion, reflecting growth of more than 8% so far this year.
Artemis data showed that later this week, the outstanding market would exceed $49 billion, and is very likely to breach $50 billion for the first time later this year.
According to the data, year-to-date issuance (January through May) has already exceeded all other years, and is above last year’s previous first five month high by more than $2.3 billion.
A news report from Reinsurance News, an industry-focused online medium, on the report indicated that the majority, or $10.34 billion of the issuance witnessed so far in 2024 was made up of 144A property catastrophe bonds, and that at this level, it had already become the fourth highest issuance for any full-year of that core component of the cat bond marketplace, according to Artemis.
The data further reflected that year-to-date, issuance had been supported by $360 million of 144A cat bonds covering other lines of business, such as cyber and health risks, and close to $173 million of privately placed cat bonds, also known as cat bond lites.
Artemis’ interactive charts also showed pricing dynamics of cat bond issuance, such as expected loss, spread and margin above expected loss. Pricing is a key consideration and concern, and the data revealed that after some spread tightening earlier this year, recent deals had led to spread widening and with higher prices evident with some of the new issuances, things were balancing out somewhat.
Impressively, cat bond and related issuance so far in 2024 already made it the sixth highest annual total since the market’s inception,
The Artemis Deal Directory currently has numerous other deals listed to complete in May and June, which at their current size would take issuance to above $11.8 billion, and all catastrophe bond and related transactions completed since the market was formed in the late 1990s.
