Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

2015 catastrophe bond & ILS issuance hits $5.224 billion


Issuance of new catastrophe bonds and other insurance-linked securities (ILS) recorded in the Artemis Deal Directory in 2015, has now reached an impressive $5.224 billion, with $3.162 billion in the second quarter alone.

Catastrophe bonds issued and outstandingDespite failing to come close to the records set in Q2 and H1 of 2014, which were both largely due to the $1.5 billion Everglades cat bond, the level and frequency of issuance through 2015 so far has been impressive to say the least.

With the completion of the Italian earthquake focused Azzurro Re I Limited yesterday, 2015 issuance of cat bonds and ILS recorded in the Deal Directory stands at $5.224 billion, where it will likely stay up to the end of H1 2015.

The outstanding market remains a little smaller than seen at the end of 2014, due to the very high volume of maturing catastrophe bonds in 2015. But at $24.547 billion it is now well-positioned to achieve another year of outright growth by the end of 2015.

2015 catastrophe bond & ILS issuance to Jun 18th 2015

2015 catastrophe bond & ILS issuance to Jun 18th 2015 (click for interactive version)

That total has been achieved from brisk issuance of 33 transactions over the course of the year so far. That’s actually three more than seen in the first-half of 2014, when 30 deals came to market.

The first-quarter of 2015 saw $2.062 billion of issuance and so far Q2 has reached $3.162 billion, reaching the forecasts that a number of market facilitator’s made earlier this year.

If the 2014 Everglades Re cat bond hadn’t been such a large deal, at $1.5 billion, we would in fact be looking at a very similar first-half in 2015, albeit with a few more private smaller transactions and cat bond lites.

But brisk and regular issuance is beneficial to investors, enabling them to put capital to work throughout the year and this in turn increases secondary market liquidity, as investors spend more time adjusting and optimising portfolios.

One final figure for this update, we’ll provide a fuller update at the end of the quarter. The trailing 12 month issuance total currently sits at $8.48 billion, which shows that the market is currently keeping up with the run-rate achieved in 2014.

Again, if you discounted the massive Everglades Re of last year, or simply downsized it to a more average cat bond size, then the last 12 months would actually be outstripping the full-year total seen in 2014.

It’s an impressive start to 2015 for the catastrophe bond market, demonstrating the continued attraction that cat bonds and ILS capacity present to sponsors and also the investment opportunity it provides.

As the asset class continues to gain profile around the world and investors become increasingly educated on its properties and the portfolio benefits it can bring to them, it’s expected that the market will continue to see brisk issuance and remain a growing part of the reinsurance market.

You can view details of every catastrophe bond issued so far in 2015 in the Artemis Deal Directory.

Artemis Catastrophe Bond & ILS Market DashboardKeep up-to-date with the make-up of the catastrophe bond and ILS market using the Artemis Catastrophe Bond & ILS Market Dashboard, designed to be a simple and effective tool providing key data and statistics on every transaction (there are 380+) contained in our catastrophe bond & ILS Deal Directory.

View the current breakdown of the market in our range of charts, allowing you to analyse key stats on the cat bond market.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.


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