As at June 30th, 2018, the volume of alternative capital in the re/insurance industry reached a record $98 billion, according to the investment banking division of insurance and reinsurance broker Aon, Aon Securities.
Aon Securities recently published its annual report on the insurance-linked securities (ILS) space, which highlights continued growth across the sector despite the impacts of 2017 catastrophe events, underlining the commitment of the capital markets to the re/insurance space.
While alternative reinsurance capital stood at $98 billion at the end of H1, catastrophe bond limit on-risk hit $30 billion, which Aon states is an increase of $4.2 billion from the prior year period, and a new record for the cat bond market.
It’s worth noting that our sister publication, Artemis, tracks the cat bond market via the Artemis Deal Directory.
The influence of alternative, or third-party reinsurance capital continues to deepen across the risk transfer space, and the sub-sector continues to outpace the growth of the traditional space and claim an increasingly larger slice of the overall reinsurance market pie.
Paul Schultz, Chief Executive Officer (CEO) of Aon Securities, commented on the ILS space: “Following record catastrophe bond issuance in 2017, and the losses from hurricanes Harvey, Irma, and Maria that year, the insurance-linked securities market has maintained its robust performance and has actually moved to a new level in terms of the number of bonds active in the market.
“We are pleased to see that the ILS sector continues to mature, and that sponsors and investors have responded to the test of loss events, by not only maintaining, but often increasing their support of this asset class. We believe that 2018 will see another strong performance.”
