Catastrophe bond issuance reaches $13.2bn in 2024 after muted third-quarter: Report

Catastrophe bond and related insurance-linked securities (ILS) market activity was more muted in the third-quarter of 2024, but the $573 million of new risk capital issued still helped the market reach $13.2 billion after the first nine-months of the year, Artemis’ brand new quarterly cat bond market report details.

The Artemis Q3 2024 Catastrophe Bond and related insurance-linked securities (ILS) Market Report, available to download now, examines the cat bond and related ILS risk capital issued in the quarter and also reviews the first nine months.

Third quarter catastrophe bond market issuance of $573 million is below the 10-year average for the quarter, but was still strong enough to take nine month issuance to a new high of $13.2 billion.

15 transactions comprised of 15 tranches of notes featured in Q3 2024, and just one of these was a traditional 144a property catastrophe bond, with the other full 144a issuance covering cyber risks. In terms of the number of deals, private, or cat bond lite transactions dominated Q3 2024 issuance. Two mortgage ILS deals also featured in the period, which we also analyse in the report although they are outside of the headline issuance figures.

This report breaks down the size, perils, triggers, and pricing metrics for both Q3 and 9M 2024 cat bond and related ILS issuance, as well as detailing upcoming maturities and the outstanding market.

As of the end of September, cat bond and related ILS issuance reached a 9M record of $13.2 billion, so as was the case at H1 2024, this year is still the third biggest ever for issuance and has closed the gap on the $13.9 billion witnessed in 2021. However, maturities outpaced issuance in the third quarter, leading to a $255 million reduction in the size of the outstanding market.

As we discuss in this new report, the outstanding market has reduced in size during the third quarter, by $255 million from the end of June to $47.7 billion. But while this is down quarter over quarter, the outstanding market remains approximately $2.8 billion larger than at the end of 2023, which reflects the record-breaking first half of the year.

There’s around $2.8 billion of maturities scheduled for the final quarter of this year, so the market is well on track to grow in 2024, but it will take an above-average level of Q4 issuance for the outstanding market to end the year higher than it was at the half-way stage.

In fact, for 2024 to be a record year for issuance and beat last year’s high of $16.4 billion, it’s going to require a fairly busy Q4 with issuance of roughly $3.3 billion or more, which has only happened twice in the past decade.

This new report also looks at cyber catastrophe bond issuance year-to-date, private cat bond issuance activity, the spread and multiples of cat bond issuance, and the upcoming maturity schedule.

In addition, our new quarterly catastrophe bond market report also features unique insights from our kind partners, with global law firm Appleby discussing how cat bonds are increasingly a mainstream risk transfer option, and specialist investment manager Twelve Capital looking at the hidden investment opportunity presented by parametric structures.

Download your copy of the new Q3 2024 Artemis cat bond market report here.

All of our catastrophe bond market charts and visualisations are up-to-date, so include this latest quarter of issuance data.

We will keep you updated on all catastrophe bond and related ILS transaction issuance as 2024 progresses, and we’ll report on the evolving trends in the cat bond, insurance-linked securities (ILS) and collateralised reinsurance market.

For full details of third-quarter 2024 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’ Q3 2024 Cat Bond & ILS Market Report here.

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