Cat bond issuance soars in H1: Swiss Re

New issuance of catastrophe bonds during the first half of 2023 set records for both the amount placed, at $9.85bn, and number of deals, with 64 tranches of notes, according to a report from Swiss Re.

First-half issuance has already exceeded that for all of 2022, with 2023 the fourth-highest year for new issuance with six months left, the report says.

The first quarter kept pace with historic new issuance levels, but issuance in the second quarter “skyrocketed”, Swiss Re explains.

One driver was the continued challenges faced by those seeking capacity in traditional reinsurance and retrocession markets, where reinsurers transfer risk. “Sponsors found the cat bond market as a great alternative but an even better complement to a hardening traditional reinsurance market,” the report says.

The robust trajectory of the catastrophe bond market is expected to continue into the second half of the year, in the absence of any major loss events, the report adds.

“Barring any events, we believe there is a strong chance that 2023 will be a record-breaking year in both the size and number of new issue bonds,” it says.

This article first appeared on our sister website Business Insurance. For further news from Business Insurance, please click here.

Back to top button