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Cat bond issuance hits record $12.5B: Aon

Posted On: Jan. 24, 2022 12:30 PM CST

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Catastrophe bond issuance reached a record $12.5 billion in 2021, topping 2020’s $11.0 billion, according to Aon Securities, a unit of Aon PLC.

Aon added in its Monday statement that more than $32 billion of bonds are now active in the market and over $117 billion of catastrophe bonds have been issued over the past 25 years.

Sponsors of the securitized risk transfer are often insurers but also include governments, from municipalities to nations, and corporate entities.

Catastrophe bonds also provide substantial capital to reinsurance retrocession markets and have gained favor as traditional markets have hardened, as with Jan. 1, 2022, renewals.

Paul Schultz, CEO of Aon Securities, said in the statement that catastrophe bonds have become “an integral part of the insurance ecosystem.”

The catastrophe bond sector was born in December 1996 with the launch of the George Town Re Ltd. bond, the statement said.