A record $ 8.5 billion in emergency bonds was issued in the first half of 2021 as the market benefited from new sponsors and increased capital inflows, according to a report Wednesday by Swiss Reinsurance Co. Ltd.
Market demand for the disaster The bonds were strong because "investors' sentiment in the first six months of 2021 led to fundraising", said Swiss Re.
The Vermont Mutual Insurance Group was among the new sponsors of a first half-year issue with its Baldwin Re 2021-1 A, which secured $ 150 million in coverage for US winds, earthquakes, severe thunderstorms, wildfires on a replacement trigger.
Such new players should continue to strengthen the market, according to Swiss Re. "New sponsors contributed to market growth and more new players are expected to reconsider the disaster bond market for competitive pricing conditions in the second half of 2021
During the first half of the year, there were also repeated and serial publishers including the San Antonio-based United Services Automobile Association, known as the USAA, with its Residential Re 2021-1, which secured $ 100 million in coverage for tropical cyclone, earthquake, including fire subsequent; heavy thunderstorms; winter storm; wildfire; volcanic eruption; meteorite impact; and other hazards, including in any case flood losses arising from car policies and tenant policies; on a replacement trigger.
USAA is one of the top five sponsors in the history of the ILS market, according to Swiss Re, and has sponsored more than $ 8.5 billion in emissions since 1997.
Market momentum should continue into the second half, said Swiss RE. "With an impressive start to the year, the ILS market can once again post a release total of over $ 10 billion at the end of the year."