Catastrophe bond and related insurance-linked securities (ILS) issuance in the first nine months of 2023 increased approximately $2 billion year-on-year to $10.9 billion, with $549 million of new risk capital brought to market in the third-quarter, according to the latest Artemis report.
The Artemis Q3 2023 cat bond and related ILS market report examines issuance in both the third-quarter and nine-months of the year. Based on data from the Artemis Deal Directory, the report shows that despite a below-average Q3, the market is still on track for a record year after an extremely busy first-half period.
Of the $549 million of issuance seen in the third-quarter, the large majority, or $400 million came from three traditional 144a property cat bond placements.
One of the traditional 144a deals issued in the quarter came from repeat sponsor SageSure although for the first time via its captive reinsurer, anchor Re, and two from sponsors returning for just their second deals – Blackstone via its Gryphon Mutual real estate captive, and Slide Insurance Company.
The rest of quarterly issuance came from three privately placed, or cat bond lite deals, one of which covered California wildfire risks, another unknown property cat risks, and then a third cyber risk transaction from Beazley.
For the first time this year, a mortgage ILS transaction also featured in the third quarter, a $281.5 million Radnor Re from Essent Guaranty.
The Artemis Q3 cat bond and ILS report also discusses the pricing of cat bond notes issued in the period, revealing that investors continue to demand higher levels of risk-adjusted returns in the current hard reinsurance market cycle.
At $10.9 billion, 2023 issuance is already $400 million above the total for all of 2022, and is already the fifth most active year ever in terms of risk capital issued, with the fourth-quarter still to come.
For full details of third-quarter 2023 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’ Q3 2023 Cat Bond & ILS Market Report here.
