Catastrophe bond and related insurance-linked securities (ILS) issuance reached a record $8.5 billion in the second quarter of 2021, of which almost $6 billion or more than 70% covered property catastrophe risks, according to the Artemis Q2 2021 market report.
The report shows that, for the first time in the market’s history, sponsor appetite and demand from investors saw issuance surpass the $8 billion mark in a single quarter.
In total, issuance reached a significant $8.5 billion; a truly remarkable level of new risk capital issuance which came from 30 transactions comprised of 66 tranches of notes.
Impressively, the large majority or $6 billion of total risk capital issued in the period covered property catastrophe risks. According to Artemis’ data, this is behind only Q2 2017, a period in which a massive $6.4 billion of issuance covered catastrophe risks.
In Q2 2021, the strong level of catastrophe risk focused deals was supported by almost $2.3 billion of mortgage ILS issuance and more than $280 million of private cat bond lite issuance.
The strong issuance level witnessed in Q2 follows a robust Q1, and takes H1 2021 issuance to a massive $13.12 billion, which is the first time H1 issuance has exceeded $10 billion.
Of the first half total, more than $8.5 billion covered catastrophe risks, which is a new record for the six month period and slightly above the previous record set in H1 2017.
When compared with the second quarter of 2020, cat bond and ILS issuance increased by nearly $5 billion, helping H1 issuance smash previous records at more than $13 billion.
To put this into context, more than $13 billion of issuance at the halfway stage of the year means that 2021 is already the third most active full-year on record, behind only the $16.4 billion and $13.9 billion recorded in 2020 and 2018, respectively.
For full details of second-quarter 2021 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 2021 Cat Bond & ILS Market Report here.
