Catastrophe bond and related insurance-linked securities (ILS) issuance has already broken the first-half year record at $10.9 billion, beating the previous high set in H1 2023 by around $600 million, with June issuance still to complete and add to the total, according to Artemis’ data.
Catastrophe bond issuance has been significant so far in 2024, and after a record first quarter for the marketplace, issuance so far in the second quarter has already pushed H1 2024 issuance to new heights.
In fact, later this week, H1 2024 issuance will surpass $11 billion, and with numerous deals scheduled to complete before the end of June, it’s on-track to beat the previous H1 record of $10.3 billion by a significant amount.
This is based on data from the Artemis Deal Directory and the publication’s range of interactive cat bond market charts.
At the same time, the size of the outstanding catastrophe bond and related ILS market has reached a new high of more than $48.7 billion, reflecting growth of more than 8% so far this year. Later this week, the outstanding market will exceed $49 billion, and is very likely to breach $50 billion for the first time later this year.
As you can see from Artemis’ chart below, which is available to view in interactive form, year-to-date issuance (January through May) has already exceeded all other years, and is above last year’s previous first five month high by more than $2.3 billion.
The majority, or $10.34 billion of the issuance witnessed so far in 2024 is made up of 144A property catastrophe bonds. Impressively, at this level, it’s already the fourth highest issuance for any full-year of that core component of the cat bond marketplace, according to Artemis.
Year-to-date issuance is also supported by $360 million of 144A cat bonds covering other lines of business, such as cyber and health risks, and close to $173 million of privately placed cat bonds, also known as cat bond lites.
The chart below, which can also be viewed in interactive form, shows the breakdown of H1 2024 issuance by the types of deals.
Artemis’ interactive charts also show pricing dynamics of cat bond issuance, such as expected loss, spread, and margin above expected loss. Pricing is a key consideration and concern, and the data shows that after some spread tightening earlier this year, recent deals have led to spread widening and with higher prices evident with some of the new issuances, things are balancing out somewhat.
Impressively, cat bond and related issuance so far in 2024 already makes it the sixth highest annual total since the market’s inception, which you can see in this chart.
The Artemis Deal Directory currently has numerous other deals listed to complete in May and June, which at their current size would take issuance to above $11.8 billion.
The Artemis Deal Directory lists all catastrophe bond and related transactions completed since the market was formed in the late 1990’s. The directory also lists the cat bonds waiting to settle, which are highlighted in green at the top of the list.
You can also download Artemis’ free quarterly catastrophe bond market reports.
