Catastrophe bond market hits new high on busy start to 2022: Report

The outstanding market for catastrophe bonds and related insurance-linked securities (ILS) reached a new all-time high at the end of the first-quarter of 2022, as a busy start to the year took Artemis’ measure of the sector to $37.5 billion.

This is according to the latest quarterly report on the catastrophe bond and related insurance-linked securities (ILS) market from Artemis, which has now been published and is available for you to download for free.

Our new report, ‘Q1 2022 – Outstanding market hits new high after strong first quarter’, analyses a busy first-quarter of the year, featuring just over $3.5 billion of new catastrophe bond and related ILS issuance and explores the composition of transactions issued during the three-month period.

That just over $3.5 billion of issuance figure includes traditional 144a property catastrophe bonds, privately placed cat bonds and also any cat bond structures covering other lines of insurance or reinsurance business (life/health/specialty etc).

It was the third-strongest first-quarter issuance, across those three categories of cat bond deals, that Artemis has recorded since we began collecting deal information for our ILS market database in 1996.

For the universe of traditional 144a property catastrophe bonds, Q1 2022 saw almost $3 billion of issuance come to market across ten deals, a slight increase on the prior year.

Private, or cat bond lite, issuance was also strong in Q1 2022 at approximately $240 million, which is a slight increase on the level reported a year ago.

In addition, $331 million of diversifying cat bond deals covering other lines of insurance or reinsurance came to market, in the typical Vitality health ILS and a welcome renewal of Pool Re’s terrorism cat bond during the quarter.

Despite not breaking records, strong first-quarter issuance in 2022 has outpaced maturing cat bond deals, helping the market to expand by roughly 5% since the end of the year.

As a result, our measure of the outstanding cat bond market now stands at approximately $37.5 billion, representing a new high.

Looking ahead, we see roughly $4 billion worth of cat bonds scheduled to mature in the second-quarter of 2022.

The long-term issuance average for Q2 is just under $4 billion, meaning it’s going to take an above-average Q2 to sustain market growth at the half-year point of 2022.

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

We’ll keep you updated on all catastrophe bond and related ILS transaction issuance as 2022 progresses, as well as evolving trends in the cat bond, insurance-linked securities (ILS) and collateralised reinsurance market.

For full details of first-quarter 2022 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’ Q1 2022 Cat Bond & ILS Market Report here.

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