Catastrophe bond issues break record in first quarter: Study

The first quarter of 2012 was the most active quarter on record in the catastrophe bond market, according to data compiled by New York-based GC Securities, a division of MMC Securities Corp. and an affiliate of reinsurance brokerage Guy Carpenter & Co. L.L.C.

The year’s first three months saw eight new transactions totaling $1.34 billion in risk capital, topping the previous first-quarter high of $1.02 billion set last year.

“Sponsors sought to lock in capital markets capacity for a diverse array of perils and structures in a somewhat uncertain traditional market environment,” GC Securities said in a statement.

Among the exposures addressed in first-quarter cat bond issues were California earthquake, U.S. hurricane, U.S. tornado, European windstorm and Japanese earthquake, including the renewal of the $300 million Muteki Ltd. transaction, which suffered a complete loss last year as a result of the March Tohoku earthquake.

New investors continued to enter the catastrophe bond market in the first quarter directly and through investments in dedicated insurance-linked securities funds, GC Securities said.

The study is available here.