Q2 Cat Bonds Issuance Nearly $3 Billion: Aon Securities Report

Aon Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, has released its latest report –“Insurance-Linked Securities Second Quarter 2015 Update” – on the insurance-linked securities (ILS) sector, which analyses the key trends witnessed in the second quarter of 2015. According to the report’s finding “catastrophe bond issuance for the period reached $2.96 billion.

When added to the record first quarter 2015 catastrophe bond issuance total of $1.69 billion, total catastrophe bond issuance for the first half of the year was $4.66 billion, compared to the first half of 2014 when ILS issuances totaled $5.90 billion.

The report broke down the figures, indicating that Q2 bond issuance “comprised nine property catastrophe bonds and one life transaction. As at June 30, 2015, catastrophe bonds on-risk totaled $23.47 billion – a six percent increase over the end of Q1 2015, during which $3.87 billion of bonds matured – but slightly lower than the record $24.29 billion seen at the end of Q4 2014.”

Aon Securities CEO Paul Schultz indicated that while bonds issued in Q2, 2015 di not “quite matching the record-breaking second quarter of 2014, results during second quarter 2015 were highly encouraging and maintained much of the momentum created during the first quarter of the year. It is worth noting that the second quarter saw the issuance of a large extreme mortality bond that brought total life and health catastrophe bond issuance for 2015 to the highest level since 2007.”

The second quarter study also revealed that “in the three months to June 30, 2015, the Aon All Bond, U.S. Hurricane Bond, and U.S. Earthquake Bond indices were all positive, with gains of 0.53 percent, 0.33 percent, and 0.37 percent respectively. The Aon BB-rated Bond Index posted a negative result of -0.04 percent.

“The Aon ILS Indices, which are calculated by Bloomberg using month-end price data provided by Aon Securities, outperformed the S&P 500 index during the period under review.

Source: Aon Benfield