Disaster bond and associated insurance-linked securities (ILS) market exercise ranges accelerated within the second-quarter of 2024, with a document $8.4 billion of recent threat capital issued that propelled the market to a document dimension of $48 billion, Artemis’ just-released new quarterly market report particulars.
The Artemis Q2 2024 Disaster Bond and associated insurance-linked securities (ILS) Market Report, out there to obtain now, examines the cat bond and associated ILS threat capital issued within the quarter and likewise opinions the first-half.
The second-quarter of 2024 noticed a document $8.2 billion of recent issuance throughout full 144A property disaster bond transactions, cat bonds masking non-catastrophe dangers, similar to cyber dangers on this case, and privately positioned cat bond offers.
34 new cat bond transactions had been issued in the course of the second-quarter, comprised of 52 tranches of notes, as constructive momentum was not solely sustained however accelerated within the interval, taking first-half 2024 issuance to a powerful $12.6 billion, which is one other document for the sector.
The quarter additionally set one other document quarter for the standard 144a property disaster bond house, which accounts for 98% of Q2 2024 issuance at $8.2 billion, and 96% of H1 2024 issuance at $12.1 billion, in line with information from the Artemis Deal Listing.
Quite a few repeat and a wholesome variety of new sponsors contributed to issuance within the second quarter. The interval additionally featured the second largest cat bond ever, a $1.4 billion Texas multi-peril deal, and two different transactions sized at $1 billion or extra. Some new dangers additionally featured this quarter, together with a small but novel parametric cloud outage cyber cat bond.
As readers of Artemis will likely be conscious, spreads within the cat bond house have fluctuated because the highs of 2023 however stay elevated and are clearly nonetheless very engaging to traders. However sponsors additionally had success this quarter, reaching robust execution on many offers whereas nearly all of issuances additionally grew in dimension whereas advertising, which our new report goes into some element on.
Given simply how robust the opening two quarters of 2024 have been, it’s no shock that the excellent cat bond market has additionally reached a brand new end-of-quarter excessive of $48 billion.
Over the remainder of the yr, Artemis’ information exhibits roughly $3.35 billion of cat bond notes scheduled to mature by year-end, which means if issuance is simply across the 10-year common we must always see the market maintain its new document dimension. Extra on this in our new report.
However, in fact, with issuance persevering with to interrupt information, the expectation is the remainder of this yr might beat long-term averages, which means additional outright progress of the disaster bond market is actually attainable.
Hurricane season provides some uncertainty over market exercise ranges for the approaching months and finish of yr, naturally, however the disaster bond market stays poised for its first $20 billion yr of issuance and a $50 billion document excellent market dimension can be in attain, if the cat bond market can preserve the tempo seen during the last couple of years.
We’ll maintain you up to date on all disaster bond and associated ILS transaction issuance as 2024 progresses, and we’ll report on the evolving tendencies within the cat bond, insurance-linked securities (ILS) and collateralised reinsurance market.
For full particulars of second-quarter 2024 cat bond and associated ILS issuance, together with a breakdown of deal circulation by elements similar to perils, triggers, anticipated loss, and pricing, in addition to evaluation of the issuance tendencies seen by month and yr.
Obtain your free copy of Artemis’ Q2 2024 Cat Bond & ILS Market Report right here.
For copies of all our disaster bond market studies, go to our archive web page and obtain all of them.
