cat bond lite

The catastrophe bond and related insurance-linked securities (ILS) market saw activity levels accelerate right the way through the busiest fourth-quarter in its history, resulting in a record year of issuance and market growth, Artemis’ new quarterly market report explains.

Private catastrophe bond issuance for 2023 has now reached $642 million, as a new issuance of privately placed insurance-linked securities (ILS) has been completed by the Eclipse Re vehicle, a nearly $100 million Eclipse Re Ltd. (Series 2023-9A) deal.

Privately placed, or cat bond lite transactions continue to contribute to total catastrophe bond issuance, although so far in 2023, the total value of deals issued is below the 10-year average, according to Artemis’ Deal Directory.

Annual global catastrophe bond and related insurance-linked securities (ILS) issuance is officially on-track to breach $14 billion for the first time ever in 2023, while traditional 144A property cat bond issuance will also reach a new record high, according to Artemis’ market data.

Six new private cat bond issuances totalling almost $91.2 million of risk capital have come to light from Eclipse Re Ltd., a private syndicated collateralised reinsurance note, private catastrophe bond issuance and reinsurance transformer platform based in Bermuda, that is owned and operated by Artex Capital Solutions.

A $15 million private catastrophe bond transaction covering California earthquake risks has come to market, with the LI Re (Series 2023-1) deal, issued by the Hannover Re owned Kaith Re vehicle, taking private cat bond issuance to almost $411 million year-to-date.

Extensions of maturity dates continue for $101.25 million of the 2020, 2021, and 2022 vintage Seaside Re private catastrophe bond transactions, allowing for ongoing development of catastrophe loss events that they are potentially exposed to.

The catastrophe bond and related insurance-linked securities (ILS) market slowed down as is seasonally anticipated during the third-quarter of 2023, but while the $549 million of issuance was below the ten-year average for the period, the catastrophe bond market remains on track for a record year in 2023, Artemis’ latest quarterly report shows.

Six tranches of privately placed catastrophe bonds have been issued with a total value of $87.6 million, by Isosceles Insurance Ltd., the Bermuda-domiciled private insurance-linked securities (ILS) and catastrophe bond platform operated by Marsh McLennan and reinsurance broker Guy Carpenter.

Aon’s private catastrophe bond platform Randolph Re has completed a new issuance of $45 million of Randolph Re (Series 2023-3) private cat bond notes that are exposed to wildfire risks, for an unnamed sponsor that we assume will again be California headquartered property casualty insurer Mercury Insurance.