Total catastrophe bonds on-risk stood at $24.4 billion at year-end 2015, representing a new all-time market high, according to Aon Benfield.
Aon Benfield revealed in a new report that maturing catastrophe bonds during 2015 totalled $6.8 billion, also a market high, which resulted in a net market increase as annual issuance continued to outpace maturities.
The total catastrophe bond issuance for 2015 reached $6.9 billion. The period did include a record Q1 issuance of $1.7 billion.
The annual issuance total included transactions worth $6.3 billion relating to property catastrophe exposures, compared to $8 billion in 2014.
During Q2 2015, 10 catastrophe bonds closed totalling $2.2 billion, four of which were based on parametric triggers, a feature that has been scarce in the market in recent years but is currently proving attractive to non-insurance corporations, a key segment for potential insurance-linked securities market (ILS) growth, according to Aon Benfield.
Paul Schultz, CEO of Aon Securities, said: “Good momentum was maintained in the ILS sector during 2015 amid an environment of increased competition with traditional insurance and reinsurance solutions. This strong level of activity ensured that at year-end, catastrophe bonds on-risk stood at an all-time high.”
“During the year we were pleased to see the growing acceptance of ILS products by corporations, which are tending to opt for fronted and parametric solutions for their inaugural issuance. These solutions have the advantage of a more rapid loss recovery.”
