Catastrophe bond issuance for the 2018 first half failed to reach the record levels hit over the same period a year ago. The result was still positive and noteworthy, according to a new report from PCS/Verisk Insurance Solutions.

The $7.4 billion in catastrophe bond issuance achieved in the 2018 first half compared to $8.8 billion raised in H1 2017. The PCS report said the number was “impressive” anyway, reflecting “much more underlying diversity than we’ve seen in the catastrophe bond market in the past.”

There were 24 transactions in the first six months of 2018. Of the total $7.4 billion, $600 million in fresh limit came from first-timers. The remainder came from sponsors who “routinely turn to the catastrophe bond market ahead of the June 1 reinsurance renewal,” PCS said.

Other details from the H1 2018 bond issuance

  • Four transactions were worth $200 million or less in Q2, while three reached at least $400 million.
  • The number of transactions focused on North America dropped to 17 in H1 2018 versus 27 the year before.
  • $1.3 billion of the 2018 H1 bond issuance came in the first quarter and was focused on Latin America—more than 15 percent of the year’s total issuance so far.
  • Seven transactions worth $2.6 billion in limit covered non-North American risks only.
  • Sponsors completed five catastrophe bonds with coverage for Canada in the 2018 first half, similar to last year.

Source: PCS/Verisk Insurance Solutions

Topics Catastrophe