Cat bond issuance sets record in first half

More than $17 billion in new catastrophe bonds were issued in the first half, according to a report Wednesday from Swiss Reinsurance Co.

This was the third consecutive year of record-breaking first-half cat bond issuance, with four of the last five years setting new highs, Swiss Re said.

The record total was spread across nearly 60 transactions, which included nine new sponsors.

The new issuance also included several “substantial placements” greater than $750 million for sponsors including Citizens Property Insurance Corp. of Florida, Everest Re, the reinsurance business of Everest Group, and the California Earthquake Authority.

The $17.2 billion of new issuance is also already the second-largest yearly total since market inception, with six months still to go.

Sentiment is bullish for continued production from the sector. “This sustained momentum is expected to continue and is supported on both sides of the value chain,” including sponsors and investors, Swiss Re said.

The cat bond market was not greatly affected by the January California wildfires, which drove elevated first-half insured losses.

“In the catastrophe bond market, there was limited impact on most transactions given the relatively low amount of wildfire risk ceded,” Swiss Re reported.