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Repeat sponsors & perils drive Q2 cat bond & related ILS to $3.6bn: Report


Issuance of catastrophe bonds and related insurance-linked securities (ILS) reached $3.61 billion in the second-quarter of 2019, as repeat sponsors, perils, as well as some returning faces, helped to deliver an above average Q2 and first-half of the year.

Q2 2019 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 2019 – Repeat sponsors and risks underpin issuance’, analyses an above average second-quarter which saw $3.61 billion of new cat bond and related ILS issuance and looks at the composition of transactions issued during the three-month period.

A total 18 deals consisting of 32 tranches of notes were brought to market in the second-quarter of 2019, resulting in approximately $3.61 billion of new risk capital, according to Artemis’ cat bond and related ILS transaction data.

Both first and second-quarter 2019 catastrophe bond and ILS issuance declined year-on-year, but at approximately $6.4 billion, first-half 2019 issuance is still the third highest ever recorded.

For the third consecutive quarter, mortgage insurance risks featured heavily in catastrophe bond and ILS issuance, accounting for more than 50% of Q2 issuance on the back of almost a third of Q1 issuance.

All four mortgage ILS deals issued in the quarter came from repeat sponsors.

Returning sponsors also brought the majority of catastrophe reinsurance risk to the market in the period, with Bermudian Hamilton Re being the only new sponsor to feature in Q2.

The quarter also saw repeat deals from Safepoint Insurance, USAA, and United P&C Insurance, bringing $335 million of U.S. multi-peril risk to market between them in Q2.

In addition, U.S. state specific multi-peril deals were a feature, including the second North Carolina multi-peril deal from the NCIUA of this year, while separate Florida multi-peril deals came from Security First and American Integrity, as well as TWIA’s latest Texas multi-peril deal.

International multi-peril transactions from reinsurance firms SCOR and AXIS provided investors with diversification during the quarter. FEMA sponsored another issuance of U.S. flood risk in Q2, while reinsurance giant Swiss Re returned to cat bonds for the first time in years with a slice of Northeast U.S. named storm risk.

As is typical of any quarter, some unknown sponsors also came to market in Q2 2019 with private capital market arrangements that deliver reinsurance and retrocession.

From the end of the first-quarter, catastrophe bond and ILS issuance has outpaced deal maturities and as such, the outstanding market at the end of the second-quarter is approximately $1.4 billion larger, at a record $39.3 billion.

According to the Artemis Deal Directory, just over $3 billion of catastrophe bond and ILS transactions are scheduled to mature in the second-half of the year. Artemis’ data shows that over the past ten-years, issuance has averaged $2.9 billion in the second-half of the year, which suggests that market growth might well continue in 2019.

Stay tuned to Artemis as we move through the second-half of 2019 and we’ll keep you updated as the catastrophe bond market continues to evolve and expand.

Q2 2019 Catastrophe Bond Market ReportFor full details of second-quarter 2019 issuance, including a breakdown of cat bond issuance 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’ Q2 2019 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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