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Cat bonds & related ILS hit record $8.5bn in Q2 2021: Report


Activity in the catastrophe bond and related insurance-linked securities (ILS) market accelerated again in the second-quarter of 2021, with the three-months seeing an incredible $8.5 billion of new risk capital come to market, according to the latest report and data from Artemis.

Q2 2021 catastrophe bond ILS market reportOur latest quarterly report on the catastrophe bond and related insurance-linked securities (ILS) market is available for you to download now.

The report, ‘Q2 2021 – On track to break multiple records’, analyses a record second-quarter featuring a stunning, just under $8.5 billion of new cat bond and related ILS issuance and looks at the composition of transactions issued during the three-month period.

Our new report also explores issues related to pricing and looks at the thinner multiples-at-market of Q2 2021 144A catastrophe bond issuance.

This last quarter was the first time in the market’s history, catastrophe bond and related ILS issuance surpassed $8 billion in a single quarter.

As a result, Q2 2021 has set a new quarterly record for issuance, at $8.5 billion.

This staggering level of new reinsurance and retrocession risk capital was supplied through 30 transactions consisting of 66 tranches of notes.

Of the record breaking Q2 issuance total, a significant almost $6 billion, or more than 70%, covered property catastrophe risks.

Our data shows that this is behind only Q2 2017, a period in which a huge $6.4 billion of quarterly issuance covered catastrophe risks.

However, as at the end of H1 2021, cat risk issuance has reached a new high of more than $8.5 billion for the first six months of this year, which is slightly higher than the record for property cat bonds issued in the first-half previously set in H1 2017.

Year-on-year, cat bond and ILS issuance increased by approximately $4.87 billion, ensuring that for the first time ever, H1 issuance has surpassed the $10 billion mark.

In fact, combined with robust investor demand for reinsurance-linked returns and sponsor appetite for protection in Q1, the $8.5 billion of issuance witnessed in Q2 now takes H1 2021 total issuance of catastrophe bonds and related insurance-linked securities (ILS) to a massive $13.12 billion.

To put this into context, more than $13 billion of issuance at the halfway stage of the year means that 2021 is already the third most active full-year on record, behind only the $16.4 billion and $13.9 billion recorded in 2020 and 2018, respectively.

As demand for collateralized reinsurance persists and the cat bond market offers particularly attractive pricing conditions, we expect issuance to remain solid through the full-year.

All of our cat bond market charts are up-to-date and include the latest quarter of issuance.

Stay tuned to Artemis as we move into the second-half of 2021.

There are already three catastrophe bonds scheduled for July and we’re aware of another being imminent with a fifth also possible in the next few weeks. So we could be in for another busy quarter. As ever, we’ll detail every transaction we see in our Deal Directory.

We’ll keep you updated on all catastrophe bond and related ILS transaction issuance, as well as evolving trends in the cat bond and insurance-linked securities (ILS) market.

Q2 2021 catastrophe bond and ILS market reportFor full details of second-quarter 2021 cat bond and related ILS issuance, including a breakdown of deal flow by factors such as perils, triggers, expected loss, and pricing, as well as analysis of the issuance trends seen by month and year.

Download your free copy of Artemis’ Q2 2021 Cat Bond & ILS Market Report here.


For copies of all our catastrophe bond market reports, visit our archive page and download them all.

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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