Catastrophe Bond Issuance Hits Record Highs in 2024

Catastrophe bond (cat bond) and insurance-linked securities (ILS) issuance have already set a new first-half year record in 2024, reaching $10.9 billion, according to data from Artemis. This surpasses the previous high of $10.3 billion set in H1 2023 by $600 million, with more deals expected to complete before the end of June, potentially pushing the total beyond $11 billion.

This record-breaking performance follows a robust first quarter for the marketplace, with significant issuance continuing into the second quarter. As of now, the outstanding cat bond and related ILS market has grown to over $48.7 billion, an increase of more than 8% this year. It is anticipated to exceed $49 billion later this week and could reach $50 billion by the end of the year.

Year-to-date issuance from January through May has surpassed all previous years, exceeding the first five months of 2023 by more than $2.3 billion. A substantial portion of the issuance, $10.34 billion, consists of 144A property catastrophe bonds, marking the fourth highest annual issuance for this segment. Additionally, $360 million of 144A cat bonds cover other lines of business like cyber and health risks, with nearly $173 million in privately placed cat bonds (cat bond lites).

Artemis’ interactive charts reveal detailed breakdowns of issuance types, pricing dynamics, and market trends. They show that while there was some spread tightening earlier in the year, recent deals have led to spread widening and higher prices, indicating a balancing trend in the market.

Impressively, the current year’s issuance has already positioned 2024 as the sixth highest annual total since the market’s inception. With numerous deals lined up to complete in May and June, issuance could exceed $11.8 billion, further solidifying 2024’s record-breaking performance.