
The catastrophe bond and insurance-linked securities (ILS) market set a new benchmark in 2024 with $17.7 billion in issuance, according to Artemis’ latest report. Despite a subdued third quarter, the market rebounded sharply in Q4 with $4.5 billion issued, marking the second-largest fourth quarter on record. This performance, combined with a record-breaking $12.6 billion in the first half, pushed the outstanding market value to a historic $49.5 billion, reflecting a 10% year-on-year growth.
Property cat bonds accounted for the majority of this growth, with 144A issuance hitting $16.6 billion, an 11% increase over 2023’s record. However, private placements, or "cat bond lite," saw a decline compared to the previous year. The data also highlighted the market’s resilience, with strong demand enabling sponsors to upsize transactions while pricing spreads decreased during marketing.
The diversity of risks covered expanded in Q4, including U.S. multi-perils, European windstorms, Chilean earthquakes, and cyber risks. Notably, new sponsors like Taiping Re and GAREAT entered the market, broadening its scope. The trend underscores the growing appeal of catastrophe bonds as an alternative risk transfer mechanism, setting the stage for a potentially record-breaking start to 2025.