Cat bond market sets new record as 12-month issuance soars

The catastrophe bond and related insurance-linked securities (ILS) market set another new record as the volume of issuance we saw over the twelve-month period ended September 2021 hit a new all-time high.

The catastrophe bond market has seen high levels of activity over the past year, driven by both investor appetites for the more liquid and transparent forms of insurance-linked security (ILS) and cedants’ appetites for reinsurance and retrocession at the higher levels Favored cat bonds tend to cover.

For the twelve months ending September 30, 2021, the Artemis Deal Directory recorded more deal flows than any other 12 month period since tracking this marketplace.

Given that the Deal Directory has been online since 1999, but the list of deals has been under construction since late 1996, we believe that this was a record 12 months for the cat bond and related ILS market, which is unprecedented in terms of emissions.

Overall, including all transactions in our deal directory, i.e. 144a real estate catastrophe bonds, life / health / specialty line cat bonds, private cat bonds and mortgage ILS deals, reached the 12-month total issue by the end of September an impressive $ 21.9 billion risk capital.

If you subtract the ILS mortgage deals we recorded, which were also a rolling 12-month emissions record at $ 7.12 billion by the end of the third quarter, the total drops to $ 14.73 billion, which is also is a record.

Those $ 14.73 billion in issues over a rolling 12 month period, including 144a real estate cat bonds, private cat bonds, and life / health / specialty line cat bonds, are annual thanks to the rate of issue Far above previous records in 2020 and so far in 2021.

If we subtract the nearly $ 735 million in private cat bonds and $ 570 million in life, health and specialty line ILS in cat bond form that we have recorded and only pure property catastrophe bonds under Rule 144a Leftover, we’re still getting a rolling 12-month issue, another record high of over $ 13.4 billion.

This bodes well for the full-year 2021 issue, which, as we recently stated, is also well on the way to reaching a new record high.

The focus on cat bonds and the higher tier, more liquid, more transparent, structured cat bond deals remains high and brokers are forecasting a strong end to the coming year.

Which suggests that almost all measures in 2021 could overshadow the annual records, paving the way for another busy year in 2022.

Stay tuned for Artemis to keep abreast of all cat bond issues and related ILS transactions, as well as evolving trends in the cat bond and insurance-linked securities (ILS) market.

Full details of the third quarter of 2021 cat bond issuance and related ILS issuance, including a breakdown of deal flow by factors such as threats, triggers, expected loss and pricing, and an analysis of issuance trends by month and year.

Download your free copy of Artemis’ Cat Bond and ILS Market Report for the third quarter of 2021 here.

For copies of all of our cat bond market reports, Visit our archive page and download them all.

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