Catastrophe bond and related insurance-linked securities (ILS) issuance was strong in the third-quarter of 2021, setting a new quarterly record at more than $2.6 billion, according to the latest report and data from ILS-focused sister site, Artemis.
The report examines the 13 transactions which came in the quarter, as 26 tranches of notes combined brought more than $2.6 billion of new risk capital to market, a record for the third-quarter.
The new report includes all catastrophe bond and related ILS issuance covered on Artemis, so features mortgage ILS market deal-flow as well.
It also dissects quarterly issuance by risks and perils, so allowing for analysis and comparison of natural catastrophe risk deals, or those linked to other lines of insurance and reinsurance business.
Mortgage ILS issuance was strong in the quarter and took 9M 2021 issuance for these types of deals close to $5 billion.
In terms of pure Rule 144a property catastrophe bonds issued in the quarter, they amounted to $1.15 billion, which was the third busiest third-quarter on record.
Add to this other insured perils and private cat bonds, or cat bond lites, but still excluding the mortgage deals, Q3 issuance reached $1.35 billion, which is again the third highest level recorded for the quarter.
But while the solid level of property cat bond issuance failed to break records in the third-quarter, it’s ensured that the record-breaking pace has continued this year. As at the end of September, pure 144a property cat bond issuance stands at $9.7 billion, which is above the previous record for the period set in 2017 and 2018 by around $600 million.
Once other ILS transactions covering life, health, and specialty lines are added to the mix, as well as any cat bond lites Artemis tracks, then issuance for the first nine months of 2021 stands at $10.82 billion, which is above the previous record by more than $400 million.
Including the record level of mortgage ILS issuance seen so far this year, and 9M 2021 issuance stands at a huge $15.9 billion, which is only $582 million behind the full-year record set last year.
As the report shows, the outstanding market size has also reached a new high. With all deals included, the outstanding market stands at a massive $52.8 billion. Excluding mortgage deals, this figure stands at just shy of $35.5 billion, and for just Rule 144a pure property catastrophe bonds, the outstanding market size is almost $32.3 billion.
Artemis data shows that 2021 looks set to break the records for issuance of pure property catastrophe bonds, catastrophe bonds including other lines (life, health, specialty etc), and also mortgage ILS issuance.
