Outstanding catastrophe bonds stood at $25 billion at the close of play on 31 March, Aon Benfield has reported.
The capital adviser’s Q1 2016 insurance-linked securities (ILS) update revealed that bonds covering US-named storm and earthquake dominated the market in Q1, as well as the Japan typhoon.
Additional placed perils included US severe thunderstorm, winter storm, wildfire, volcanic eruption and meteorite impact. Canada earthquake and US medical benefits ratio coverage were also part of the Q1 2016 issuance season.
Total catastrophe bond issuance for the period reached $2.22 billion across 10 transactions, representing a new Q1 record for the ILS sector and an increase of more than 30 percent on the previous record set in Q1 2015.
Secondary markets activity increased during the quarter, with trade volume rising more than 25 percent compared to Q4 2015.
In total, 311 trades totalling approximately $308 million were reported in Q1 according to the Financial Industry Regulatory Authority’s Trade Reporting and Compliance Engine (TRACE).
Paul Schultz, CEO of Aon Securities, commented: “With market volume typically concentrated around the important reinsurance renewals periods of Q2 and Q4, the strong start to 2016 bodes well for the year ahead, especially in light of the prevailing competitive reinsurance and insurance landscape, which contributed to the more moderate issuance volumes of Q4 2015.”
