A record $8.4 billion of catastrophe bond and related insurance-linked securities (ILS) issuance occurred in the second quarter of 2024, taking first half issuance to a new high of $12.6 billion, and the outstanding market to a record $48 billion, according to Artemis’ latest quarterly market report.
Available to download for free, the Artemis Q2 2024 cat bond and related ILS market report dissects the largest ever single quarter of issuance, which was dominated by a record $8.2 billion of full 144A property cat bond issuance.
All in all, 34 transactions comprised of 52 tranches of notes came to market in Q2 2024, and while the large majority of these were traditional 144A property cat bonds, some more cyber risk came to market in the quarter as did a novel cloud outage cyber deal.
Issuance was dominated by repeat sponsors, but a healthy number of new sponsors also featured in the quarter. Interestingly, Q2 2024 also featured the second largest cat bond in history, a $1.4 billion Texas multi-peril deal, while two other transactions sized at $1 billion or more also came to market in the period.
The record level of Q2 issuance followed a record opening quarter for the cat bond space, as investor and sponsor appetite were not only maintained but accelerated in an extremely active period.
As a result, H1 2024 issuance of $12.6 billion is also a record for the market. Of this, $12.1 billion came from 144A property cat bonds, accounting for 96% of total issuance so far in 2024.
Given how strong cat bond issuance has been so far this year, it’s no surprise that the outstanding market ended Q2 2024 at a new high of $48 billion, representing growth of 7% from the end of 2023.
Artemis’ report also examines the pricing of quarterly issuance. Spreads in the cat bond space have fluctuated since the highs of last year but do remain elevated and are clearly still attractive to investors. At the same time, sponsors also had success in Q2 2024, achieving strong execution on many deals while the majority of issuances also grew in size while marketing.
Looking ahead, the Artemis Deal Directory shows that roughly $3.35 billion of cat bond notes are scheduled to mature before year-end 2024. So, if it’s an average H2 for the marketplace, based on Artemis’ data, then the market’s record size should be sustained.
For full details of second-quarter 2024 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’ Q2 2024 Cat Bond & ILS Market Report here.
