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Member, Beacon International Group, Ltd.
Nonlife catastrophe bonds issued during the second quarter totaled $2.2 billion, up slightly from $2.1 billion in the same period last year, according to a report by Willis Capital Markets & Advisory, a unit of brokerage Willis Group Holdings P.L.C.
There were 10 nonlife cat bond deals made up of 14 tranches during the second quarter of this year compared with seven deals made up of 12 tranches during the comparable period of 2012, Willis said in the analysis released Tuesday.
For the year to date, total nonlife capacity issued now stands at $3.8 billion and could reach $6 billion to $7 billion by the end of the year, according to the report.
Of the current catastrophe bond capacity, 72% has exposure to U.S. hurricane risks, Willis noted. But a number of diversifying bonds were placed in the second quarter of this year, the report noted, including bonds that offer investors exposure to Australian cyclone and Turkish earthquake risks, the report noted.
It remains to be seen whether the success of such issuances will draw more sponsors of non-U.S. wind perils to the market, according to the report.
Nine out of the 10 second-quarter catastrophe bond sponsors were repeat issuers, with American Coastal Insurance Co. the only new sponsor, according to the report.
Seven sidecars have been announced during the year so far, with an estimated capacity of more than $1 billion.
“We may not yet be scaling the heights of 2006 (circa $3.3 billion capital issued), but relative to the $1.7 to $2.0 billion issued in the whole of last year, the market appears to be growing,” Willis said in the report.