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Record catastrophe bond year ends with busy Q4 2020: Report


Catastrophe bond issuance reached record levels in 2020 and the busy year was topped-off with a record fourth-quarter as well, as the market demonstrated its resilience and ability to expand its relevance even under ongoing pandemic conditions, according to the latest report and data from Artemis.

Q4 2020 catastrophe bond 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, ‘Q4 2020 – Busy fourth-quarter completes record catastrophe bond year’, analyses an extremely busy fourth-quarter that saw an impressive $6 billion of new cat bond and related ILS issuance and analyses the composition of transactions issued during the three-month period.

Our new report also features a brief review of full-year 2020 catastrophe bond and related ILS issuance levels, which also broke records in a number of ways.

Catastrophe bond and ILS issuance reached a staggering $6 billion in Q4 2020. As shown by the Artemis Deal Directory, this is almost $3.5 billion above the ten-year average for the quarter, and the only time in the market’s history that fourth-quarter issuance has reached this level.

In each quarter of 2020, although most notably in Q1 and Q4, catastrophe bond and ILS issuance was above average. Combined with the previous three quarters, the record-breaking level of both transactions and issuance in Q4 drove annual issuance to $16.4 billion, which, as shown by the Artemis Deal Directory, is another record.

Although $4.3 billion of mortgage insurance risk helped annual issuance in 2020 reach new heights, for the very first time, cat bonds covering property catastrophe risks exceeded $11 billion, which is yet another record for the sector.

The $6 billion of total new cat bond and ILS risk capital brought to market in the fourth-quarter came from 24 transactions consisting of 53 tranches of notes.

The issuance in Q4 featured sponsors seeking insurance, reinsurance and retrocessional protection, with a number of renewal deals as well as sponsors completely new to the catastrophe bond market.

Investors took advantage of a wide range of perils and geographies of risk ceded from a growing sponsor base, including six first-time sponsors.

This record-breaking fourth-quarter, when combined with the rest of 2020’s active period of issuance, saw the outstanding market at year-end reached a new high of $46.4 billion. As shown by the Artemis Deal Directory, this represents year-on-year growth of approximately $5.7 billion.

Stay tuned to Artemis as we move through the first quarter of 2021, which is forecast to be a busy period for new catastrophe bond issuance as well.

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.

Q4 2020 catastrophe bond and ILS market reportFor full details of fourth-quarter 2020 cat bond and related ILS issuance plus an overview of the full-year, including a breakdown of deal flow by factors such as perils, triggers, expected loss, and pricing, as well as analysis of the issuance trends by month and year.

Download your free copy of Artemis’ Q4 3020 Cat Bond & ILS Market Report here.


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

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