The $4.5 billion fourth-quarter Catastrophe bond and related insurance-linked securities market issuance has taken the outstanding market to a record near $50 billion.

This, from the just-published Artemis Q4 2024 Catastrophe Bond and related insurance-linked securities Market Report, which also reported the full-year 2024 total at a record $17.7 billion, from 93 transactions.

Artemis reported that the $4.5 billion fourth quarter was actually below the amount seen in the prior year, but was the second largest fourth quarter in history.

Artemis said: “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 per cent.”

The report added: “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 do not stop there.”

In terms of 144A property cat bond issuance, 2024 has set a new record of $16.6 billion, up 11 per cent on the previous high in 2023.

Total 144A cat bond issuance, which includes 144A cat bonds covering other lines of insurance and reinsurance 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.

Artemis said that four first-time sponsors entered the catastrophe bond market in Q4 2024, 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.

The report said: “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 midpoint of initial guidance. This indicates a softer market, so investors will be looking for price stabilisation in 2025.

“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 per cent from the end of 2023.

“On average, the size of the outstanding market has risen by around 8 per cent 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 ten years.”