Catastrophe bond market hits new high of $38.2 billion

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The global catastrophe bond market grew nearly 2% in the second quarter of 2022 as sponsor demand drove strong issuance and helped to grow the outstanding catastrophe bond market to $38.2 billion in 2022. June 30, 2022.

Issuance of new catastrophe bonds reached $5.2 billion in the second quarter of the year. You can download our brand new cat bond market report here, which details issuance trends and breaks down market activity.

For the third time in the past decade, second-quarter catastrophe and ILS bond issuance topped the $5 billion mark, hitting nearly $5.2 billion across 27 deals.

Year-over-year, second-quarter emissions fell more than $1.2 billion, but were still above the 10-year average for the quarter of about $1.1 billion, according to data from Artemis and as detailed in the new report.

A strong second quarter on the back of an above-average start to the year drove issuance at the semi-annual stage to $8.7 billion.

Of this number, the vast majority, or 92%, came from 144A real estate cat bond trades.

The new Artemis report reveals that it was one of the best first-half periods on record, both for global issuance and real estate cat bond issuance.

By the end of the first quarter of 2022, the outstanding market had reached a new high of $37.5 billion, and we said at the time that it would take an above-average second quarter to sustain pure growth. simple market, given the approximately $4 billion in maturities expected.

But, the issuance of catastrophe bonds in the second quarter of 2022 exceeded this figure, bringing outstanding market to a new record of $38.2 billionend of June.

Analyze venture capital issued and outstanding by year in this chart.

This is a strong result for a market that has struggled with pressures from the macroeconomic environment and its effects on broader capital markets and investor appetite.

Despite wider spreads and effectively much higher online rates for reinsurance and retrocession backed by cat bonds, the market saw strong demand from existing and new sponsors in the second quarter.

In the first half of 2022, in number of new cat bond transactions, the 52 issued are up slightly compared to last year.

But while the number of deals had increased, in terms of venture capital, overall issuance was down, year-over-year, by about $781 million.

This reflects the smaller deals issued this year, compared to the previous year, as the limited amount of capital available for new catastrophe bonds and the more demanding investor base meant some deals were smaller or could not be concluded.

In terms of the dollar value of catastrophe bonds issued, May was the busiest month of 2022 so far, with nearly $2.7 billion. This was followed by issuances of $2.2 billion in March and nearly $2 billion in June.

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

We’ll keep you updated on all catastrophe bond issuances and related ILS transactions as 2022 progresses, as well as any evolving market trends for catastrophe bonds, disaster-related securities, and more. insurance (ILS) and guaranteed reinsurance.

Q2 2022 Catastrophe Bond Market ReportFor details on the second quarter 2022 catastrophe bond issuances and related ILS, including a breakdown of deal flow by factors such as perils, triggers, expected loss and pricing, as well as a analysis of emission trends observed by month and year.

Download your free copy of Artemis’ Cat Bond & ILS Market Report Q2 2022 here.

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

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