Catastrophe bond and insurance-linked securities (ILS) issuance was at the second highest level ever recorded during the second-quarter of 2018, with $5.16 billion generated from 26 deals and 46 tranches of notes, according to Artemis’ Q2 2018 Catastrophe Bond & ILS Market Report.
When combined with the record-breaking level of first-quarter issuance, H1 2018 issuance stands at $9.39 billion, meaning 2018 is already the second most active full-year ever recorded, as shown by data from the Artemis Deal Directory.
Both new and returning sponsors were active in Q2, and 14 tranches of notes valued at roughly $500 million were privately placed, with some transactions backed by unknown sponsors.
The alternative, or third-party reinsurance market bounced back in Q2 2017 after muted results in Q2 2015 and 2016, with over $7 billion of issuance, and while Q2 2018 issuance is roughly $1.8 billion lower, the outstanding catastrophe bond and ILS market ended H1 2018 at an impressive $35.3 billion, explains Artemis.
As the report highlights, the huge $35.3 billion outstanding market size represents year-on-year growth of $6 billion, and growth of $2.4 billion from the end of Q1 2018, with the H1 total standing $4.3 billion higher than at the end of 2017.
Artemis notes that the global catastrophe bond and ILS market is going from “strength to strength” despite the 2017 catastrophes and subsequent market losses, with both investors and sponsors remaining committed to the sector.
It added that, with only $1.6 billion of maturities scheduled for H2 2018, it seems likely the catastrophe bond and ILS market will achieve outright growth again this year, with annual issuance expected to exceed $10 billion for the second year running.
