Catastrophe bonds break record in 2021, as market expands again: Report

The market for catastrophe bonds and related insurance-linked securities (ILS) saw records broken once again in 2021, as annual issuance surpassed the previous high set a year ago and reached $14 billion across pure property cat bonds, other line of business cat bonds and private deals, according to Artemis’ data.

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.

The report, ‘Q4 2021 – Market expands as annual issuance breaks record by 15%’, analyses a busy fourth-quarter of the year featuring $3.2 billion of new catastrophe bond and related ILS issuance and explores the composition of transactions issued during the three-month period.

Our new report also analyses the record full-year issuance of catastrophe bond and related insurance-linked securities (ILS), covering every transaction that we’ve analysed here at Artemis, with a new dedicated mortgage ILS market section as well.

For the universe of traditional 144a property catastrophe bonds, Q4 2021 was the second most active fourth quarter ever, in terms of risk capital issued, at approximately $2.8 billion.

However, for the full-year 2021, it was a record for property cat bond issuance, with more than $12.5 billion of risk capital issued covering a wide range of perils and geographies.

Once you include all catastrophe bonds covering other lines of business (life/health/specialty etc), as well as privately placed, or cat bond lite deals, that we’ve tracked in our Artemis Deal Directory, then Q4 2021 issuance reached an impressive $3.2 billion and full-year 2021 issuance hit a new record of $14 billion.

At $14 billion, that surpasses the previous annual record set in 2020 by almost $2 billion, or 15%.

As a result of the record level of property cat bonds, cat bond deals covering non-catastrophe risks and private cat bond transactions, the outstanding cat bond market at the end of 2021 has reached a new high of almost $36 billion, according to Artemis’ data.

This represents outstanding cat bond market growth of more than $2.5 billion, or almost 8%, since the end of 2020.

A real measure of market strength is that fact that, for the fourth year running, the outstanding market size has end the year above $30 billion and it has grown in size for three consecutive years now.

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 well as evolving trends in the cat bond and insurance-linked securities (ILS) market.

For full details of fourth-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’ Q4 2021 Cat Bond & ILS Market Report here.

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