It’s official. If the present pipeline of latest offers all full earlier than the top of this 12 months, at present focused sizes or bigger, then the disaster bond market will set a brand new document for major issuance in 2024 of roughly $16.54 billion, based on Artemis’ Deal Listing knowledge.
With three new disaster bond issuances having launched to traders in current days, the pipeline of cat bonds at the moment scheduled to finish and settle this 12 months has built-up to roughly $1.93 billion, Artemis’ Deal Directory shows.
With settled disaster bond issuance already at simply over $14.6 billion, throughout 144A property cat bonds, 144A offers masking specialty and different traces of danger, plus personal cat bond points we’ve tracked, the market is now on the right track to beat the earlier document set a 12 months in the past.
2023 noticed a document nearly $16.45 billion of latest cat bonds issued throughout these three classes, which beat the earlier document from 2021 when nearly $14 billion of latest cat bond offers got here to market.
Now, including the roughly $1.93 billion present pipeline of cat bonds scheduled to finish earlier than year-end to the present complete of $14.6 billion, would take the market to a brand new annual issuance document of virtually $16.54 billion for full-year 2024.
The chart above reveals the place issuance will finish the 12 months if each disaster bond within the pipeline accomplished and settled at its present focused dimension, for a complete of $16.54 billion of danger capital to be issued in 2024.
In fact, this determine might change, both by rising bigger as among the cat bonds within the pipeline get upsized (which is completely attainable).
Additionally attainable although, is that some maybe don’t obtain their targets, or some might doubtlessly be delayed and fall into the subsequent 12 months for settlement.
Nevertheless, with roughly 5 weeks of the 12 months left to run, there may be nonetheless time for extra new cat bonds to hitch the market pipeline and take the full-year disaster bond issuance for 2024 to an much more spectacular document.
Trying on the classes of disaster bonds we monitor at Artemis in our main interactive chart on issuance and the size of the outstanding cat bond market, so 144A property cat bonds, 144A offers masking specialty and different traces of danger, plus personal cat bond points we’ve tracked, there may be one other notable disaster bond market document that now seems set to be achieved.
144A property disaster bond issuance will attain a brand new annual document excessive of simply over $15.44 billion for 2024, if the pipeline completes on the at the moment focused sizes this 12 months.
You possibly can analyse disaster bond issuance by 12 months, because it at the moment stands, split out by these three categories in another of our interactive charts here.
Issuance of 144A disaster bonds masking different traces of enterprise, resembling specialty and cyber, will attain $675 million if the pipeline completes as deliberate, which is at the moment down on the prior 12 months’s $832 million, however aligned with the 10-year common for this class of offers.
Up to now in 2024, together with the pipeline, we’ve tracked 91 disaster bond points, which is near the document of 95 offers tracked final 12 months.
In 2024 thus far, we’ve tracked debut disaster bonds from 12 new first-time sponsors which have entered the market, which is barely decrease than the 13 first-time cat bond sponsors that got here to market in 2023.
Lastly, if the pipeline completes as at the moment deliberate, then the excellent disaster bond market, by Artemis’ reckoning, would attain $48.32 billion, representing cat bond market development of roughly $3.36 billion over the course of 2024.
2024 seems set to be one other banner 12 months for the disaster bond issuance market and regardless of a heavy maturity schedule, the investor group has responded to sponsors demand for reinsurance and retrocession, to shut on a really spectacular new document quantity of cat bond offers.
The catastrophe bond maturity schedule (view our chart tracking this here) is especially heavy within the first-half of 2025, with over $10 billion slated to mature within the first-half of subsequent 12 months.
Which suggests the cat bond market might battle to realize additional development by way of the first-half of 2025. However the maturity schedule is far decrease for H2 subsequent 12 months, so it appears there may be each likelihood of additional disaster bond market development throughout the full-year forward.
So, it now seems possible we’ll see a second consecutive document 12 months of disaster bond market issuance in 2024, which drives house the well being of the cat bond market and the still-growing demand for capital markets protection from sponsors.
The Artemis Deal Directory lists all disaster bond and associated transactions accomplished because the market was shaped within the late 1990’s. The listing additionally lists the cat bonds ready to settle, that are highlighted in inexperienced on the prime of the checklist.
Download our free quarterly catastrophe bond market reports.
We monitor catastrophe bond and related ILS issuance data, essentially the most prolific sponsors in the market, most lively structuring and bookrunning banks and brokers, which risk modellers feature in cat bonds most frequently, plus a lot more.
Find all of our charts and data here, or by way of the Artemis Dashboard which gives a useful one-page view of cat bond market metrics.
All of those charts and visualisations are up to date as quickly as a brand new cat bond issuance is accomplished, or as older issuances mature.
