Record 2023 cat bond activity forecast
The catastrophe bond market could post a record year, a Bermuda lawyer has speculated.
The website of the international law firm, Appleby, has published an article quoting the Bermuda managing partner Brad Adderley that after a record-breaking first six months for the cat bond market, the current market landscape looks set to make it a busy year-end, even after a third quarter slow down.
Mr Adderley said that in the final quarter of the year, issuance levels tend to pick up ahead of the January renewals.
He said: “I think you’re going to see a big year-end for cat bonds. I wouldn’t be surprised if it turns out to be the best year ever for issuance.
“Importantly, we’ve seen some new risk and new sponsors as well, who are learning and could return in the future.”
The article has been taken from the just published Artemis Q3 2023 Catastrophe Bond & ILS Market Report.
Mr Adderley expects an increase in the number of sidecars as part of a busy year-end for the insurance-linked securities market.
He said that with a hard reinsurance market, companies that have pulled out and other factors, there was space for new commercial reinsurers to get in, some, maybe before the end of the year.
He said: “But look, if they do, and I hope that they do, they’re not likely to be market leaders, to set or affect pricing, so it doesn’t really adversely impact existing players.
“So, with this renewal season fast approaching and what has happened, and with the extremely active cat bond market, and with the sidecars and potential new start-ups, next year is going to be really interesting, as well.
“Will the momentum continue? That is the big question on people’s mind.”
Meanwhile, Artemis reported that year-on-year, 2023 cat bond issuance for the first nine months increased by about $2 billion to a record $10.9 billion, driven by the more than $7 billion of issuance seen in the busiest second quarter ever.
According to The Artemis Deal Directory “the staggering level of risk capital” issued in the first nine months came from 62 transactions, four more than for the same period in 2022.
May was the most active month with 16 deals, followed by June with 11 deals, and then nine in January, March and April.
Need to
Know
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
