Aon has record amount of cat bonds in the pipeline: Andy Marcell

Broking group Aon is expecting a strong chance for another record year of issuance in the catastrophe bond market, with the pipeline of potential deals that could get executed being as long as it has ever been for the firm.

This is according to Andy Marcell, the CEO of Aon’s Reinsurance Solutions, who said during a pre-Monte Carlo Rendez-vous briefing that the cat bond market is one area he believes that insurance-linked investor flows are likely to continue to be seen.

Aon is generally bullish, in terms of sentiment, for cat bonds to become an increasingly relevant product for its reinsurance cedents, as well as for other types of risk transfer buyers.

During the briefing, the Aon Reinsurance Solutions CEO said that his unit welcomes new capital in all its forms, including for property catastrophe risks, which are an area Marcell said he expects there to be ample opportunities at the January renewal season.

So, it’s perhaps no surprise to hear that Aon’s catastrophe bond pipeline is looking particularly busy at this time.

Marcell explained that, in ILS markets, “On the property side, there’s activity and I think that money will flow into the cat bond space.”

He went on to state that, at Aon, “In fact we have a record amount of cat bonds in our pipeline.”

With this, Marcell will be referring to the Aon Securities team, which works alongside the reinsurance brokers to originate, structure, execute, sell and trade insurance-linked securities (ILS) such as catastrophe bonds.

Marcell hinted that 2022 could be another record year, but also said that 2023 could see even higher demand for the cat bond product.

“We see demand for cat bonds we anticipate in 2023 growing over 2022 and exceeding 2021,” Marcell said. Adding that, “We think that’s an increasingly relevant avenue for our clients.”

Also read: Cat bond market momentum to carry into 2023: Aon’s Schultz.