Non-life insurance-linked securities (ILS) capital reached $70 billion at year-end 2015 as net new capital continued to enter the market, according to Willis Capital Markets & Advisory (WCMA).
WCMA’s update revealed that the 2015 figure exceeded the $65 billion level seen in 2014.
The new 2015 figure was the result of reinsurer and insurer interest and investor confidence, which continued to grow.
Non-life catastrophe bonds issuance, which has seen continued year-on-year growth since 2011, was down to $6.2 billion for the full year, compared to the record $8 billion level issued during 2014, according to the update.
WCMA attributed this to on-off factors such as multi-year deal interception dates.
Bill Dubinsky, head of ILS at WCMA, said: “Looking at the headline catastrophe bond figure, a decline in issuance appears to be the case. However, this general picture fails to account for the huge $1.5 billion transaction completed in 2014—Citizens’s Everglades Re—which skews any prior year comparison.”
“The number of deals in 2015 and transactions, such as Azzurro Re, demonstrate that ILS is becoming a core component of many reinsurers and insurers’ risk transfer strategies and investor appetite remains strong. We therefore expect continued growth in ILS assets under management in 2016, including growth in catastrophe bonds.”
