Record cat bond issuance of $17.7bn in 2024 takes outstanding market near $50bn: Report
Catastrophe bond and related insurance-linked securities (ILS) market issuance of $4.5 billion in the fourth-quarter was sufficient to take the full-year 2024 total to a record $17.7 billion, while the outstanding market reached a new all-time-high of $49.5 billion, Artemis’ new quarterly cat bond market report shows.
The Artemis Q4 2024 Catastrophe Bond and related insurance-linked securities (ILS) Market Report, available to download now, examines the cat bond and related ILS risk capital issued in the quarter and also reviews the record full year.
Fourth-quarter catastrophe bond market issuance reached $4.5 billion, which was below the amount seen in the prior year, but this second-largest fourth quarter in history took annual issuance in 2024 to a record $17.7 billion from 93 transactions.
Despite a slow third-quarter, H2 2024 catastrophe bond and related ILS issuance surpassed $5 billion for just the second time ever and combined with a record H1 of more than $12.6 billion, 2024 issuance far outpaced maturities and resulted in the outstanding cat bond market ending the year at a new high of $49.5 billion, representing year-on-year growth of 10%.
This report breaks down the size, perils, triggers, and pricing metrics for both Q4 and full year 2024 cat bond and related ILS issuance, as well as detailing upcoming maturities and the outstanding market.
With a new annual issuance record set in 2024 and the market now approaching a new milestone of $50 billion of cat bond risk capital outstanding, the records detailed in the report don’t stop there.
In terms of 144A property cat bond issuance, 2024 has set a new record of $16.6 billion, up 11% on the previous high in 2023.
Total 144A cat bond issuance, which includes 144A cat bonds covering other lines of re/insurance business such as cyber and terrorism, also hit a new high of $17.2 billion.
Private, or cat bond lite issuance, did contribute in Q4 and full year 2024 but fell year-on-year for both periods.
As we discuss in this new report, in Q4 2024, four first-time sponsors entered the catastrophe bond market, bringing the total number of new sponsors for the year to 13, as insurers and reinsurers increasingly turned to the capital markets to augment their reinsurance and retrocession needs.
Strong demand from the cat bond investor base saw the large majority of tranches upsize while marketing in Q4 2024, helping sponsors achieve strong execution on deals as all but three tranches of notes saw their final spread decrease from the mid-point of initial guidance. This indicates a softer market, so investors will be looking for price stabilisation in 2025.
As our report also details, issuance activity throughout 2024 has taken the outstanding cat bond market to a new high of $49.5 billion, reflecting outright market growth of 10% from the end of 2023.
On average, the size of the outstanding market has risen by around 8% each year over the past decade, with growth occurring in each year but 2019, when it contracted slightly. At the end of 2014, the outstanding market size was $25.3 billion, so it has almost doubled in 10 years.
This new report also looks at cyber catastrophe bond issuance year-to-date, private cat bond issuance activity, the spread and multiples of cat bond issuance, and the upcoming maturity schedule.
In addition, our new quarterly catastrophe bond market report also features unique insights from our kind partners, with global law firm Appleby explaining that the start of 2025 could be another busy period, as the cat bond market shows no signs of slowing down.
Download your copy of the new Q4 2024 Artemis cat bond market report here.
All of our catastrophe bond market charts and visualisations are up-to-date, so include this latest quarter of issuance data.
We will keep you updated on all catastrophe bond and related ILS transaction issuance as 2024 progresses, and we’ll report on the evolving trends in the cat bond, insurance-linked securities (ILS) and collateralised reinsurance market.
For full details of fourth-quarter 2024 cat bond and related ILS issuance, including a breakdown of deal flow by factors such as perils, triggers, expected loss, and pricing, as well as analysis of the issuance trends seen by month and year.
Download your free copy of Artemis’ Q4 2024 Cat Bond & ILS Market Report here.
For copies of all our catastrophe bond market reports, visit our archive page and download them all.
