Catastrophe bonds & related ILS to break records in 2021: Report

Catastrophe and related insurance-linked securities (ILS) issuance was strong in the third quarter of 2021, breaking a new quarterly record of more than $ 2.6 billion, according to the latest report and data from ILS-focused sister site Artemis.

Artemis’ latest quarterly report on the Catastrophe and Related Insurance-Linked Securities (ILS) market is now available for download.

The report examines the 13 transactions that occurred during the quarter, as 26 tranches of debt combined raised more than $ 2.6 billion in new venture capital, a record for the third quarter.

The new report covers all of the catastrophe bonds and related ILS issues covered on Artemis and therefore also includes the mortgage ILS market deal flow.

In addition, the quarterly emissions are broken down by risk and hazard, which enables an analysis and comparison of natural catastrophe risk businesses or those linked to other insurance and reinsurance businesses.

Mortgage ILS issuance was strong in the quarter, lasting nearly $ 5 billion for these type of deals in 9M 2021.

In terms of Rule 144a-only property catastrophe bonds issued during the quarter, they totaled $ 1.15 billion, which was the third-strongest third quarter on record.

Add to that other insured risks and private cat bonds or cat bond lites, but still excluding the mortgage deals, third-quarter issues hit $ 1.35 billion, again the third highest for the quarter.

But while the solid real estate cat bond issuance failed to break records in the third quarter, it is certain that the record pace continued this year. As of the end of September, the pure issue of 144a real estate cat bonds was $ 9.7 billion, around $ 600 million above the previous record for the period 2017 and 2018.

As soon as further ILS transactions for life, health and specialty lines as well as all Cat-Bond-Lites-Artemis-Tracks are added, the emission for the first nine months of the year 2021 will be 10.82 billion US dollars, which is more than the previous record is than $ 400 million.

Including record levels of mortgage ILS issuance so far this year and 9M 2021 issuance, the issuance stands at a whopping $ 15.9 billion, down just $ 582 million from last year’s full year record.

As the report shows, the outstanding market size has also reached a new high. With all deals included, the outstanding market is a massive $ 52.8 billion. Excluding mortgage deals, that number is just under $ 35.5 billion, and for Rule 144a-only real estate catastrophe bonds alone, the outstanding market size is nearly $ 32.3 billion.

Artemis data shows that 2021 is expected to break the records for real estate-only catastrophe bond issuance, catastrophe bond issue including other lines (life, health, specialty, etc.) and also mortgage ILS issuance.

Download Artemis’s latest quarterly report on the Catastrophe Bond and Related Insurance-Linked Securities (ILS) market now.

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