Aon Benfield Securities has set a new record for annual insurance-linked securities (ILS) issuance with the pricing of the latest offering from Nakama Re.
When Nakama Re Series 2014-2 was priced on 12 December, the total property catastrophe bond issuance for 2014 stood at $8.03 billion.
This figure excludes almost $500 million in new issuance through private ILS structures.
The previous record for annual property catastrophe bond issuance was set in 2007 when $7.86 billion of property catastrophe bonds were brought to market.
Aon Benfield Securities has partly attributed this growth to the introduction of its CATstreamSM platform, which allows catastrophe bonds to be brought to market in less than half the time of traditional ILS solutions.
Aside from the record annual issuance, 2014 has witnessed several further records being established in the ILS sector, including a record Q2 issuance total of $4.5 billion across 12 catastrophe bond transactions, a record H1 issuance total of $5.9 billion, and a record value of catastrophe bonds on-risk—which stood at $22.7 billion as of 30 November 2014.
The year also saw a new record established across other forms of collateralised reinsurance capital.
As of 30 June 2014, collateralised reinsurance capacity excluding catastrophe bonds had reached a record $36.2 billion, compared to $29.4 billion in 2013 and just $7.7 billion in 2009.
Paul Schultz, CEO of Aon Benfield Securities, said: “The inflows of alterative capital into the reinsurance industry over the past two years have been well reported, and in 2014 we have seen the results of this influx in terms of the volume of ILS transactions that have been completed.”
“This year, however, has been characterised by more than just largesse, as we have taken positive steps to expand the scope of the ILS offering by structuring innovative deals to address new perils, new territories, and new currencies, as well as making ILS solutions more accessible to smaller firms and those companies wanting to structure smaller transactions.”
“Our outlook for the ILS sector for 2015 remains highly positive, and we anticipate that the capital inflows and strong pipeline of opportunities seen in 2014 to continue.”
