Catastrophe bond issues remained strong in the first half of this year, with $ 7.7 billion in new issues after a record year of 2021, according to a report released on Friday by Moody’s Investors Service Inc.
The activity is expected to be robust for the rest of 2022, Moody’s said.
New issues for the first quarter amounted to $ 3.2 billion, the third highest total ever for the first quarter, after 2020 and 2018.
Momentum continued into the second quarter, with new issues of $ 4.7 billion, and Moody’s said that “with traditional reinsurance rates still rising, we expect the issue to remain strong for the rest of the year.”
Last year, a record-breaking new share issue of 1
3.5 billion dollars was noted, an increase from 11.4 billion dollars in 2020, and more than twice as much for 2019.This year’s issue has revolved around physical disasters, Moody’s data showed. Bonds that provide coverage for international multi-risk and the US multi-risk have together accounted for 40% of the issue.
US earthquakes have accounted for another 15%, followed by the US storm and hurricane with 6% and Japan with 5%.
Moody’s said it expects non-disaster emissions, such as terrorist and health risks, to increase as the ILS market continues to expand.
On Thursday, Aon PLC said the first half of the issue reached $ 7.94 billion and that the market remains strong “as insurers and reinsurers increasingly turn to alternative capital markets to complement traditional reinsurance.” It added that “if we look ahead, the pipeline is still robust.”
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