Global alternative reinsurance capital had climbed to $95bn by the end of first quarter, an increase of 7 percent from the end of 2017, according to estimates by Aon Benfield.

In its latest ILS market update, the broker said the $9bn increase in the three-month period took the total amount of global reinsurance capital to $610bn at the end of Q1.

Aon said traditional capital was flat at $515mn in the first three months of the year.


In the second quarter – which Aon said is typically the largest in the year for catastrophe bond volume - the broker pegged issuances at $4bn.

That was the third-largest Q2 issuance on record, Aon reported, with a large amount of US wind-exposed capacity purchased.

Aon said the second quarter of 2018 also saw a record volume of maturating bonds, with nearly $3bn of limit coming off-risk.

However, the broker noted that the capital was entirely replaced, and was expanded through $1bn of new issuance volume.

The total outstanding catastrophe bond limit was over $30bn at the end of the second quarter – with non-life issuances making up $28.3bn – which Aon said was a record-high for the market.

Nearly all issuances during the quarter were from repeat sponsors the broker said, with the exception of TransRe which entered the market in May with its Bowline 2018-1 offering.

Aon said pricing for catastrophe bonds remained below the levels seen before the 2017 catastrophes, with a weighted-average multiple at issuance of 2.46x for the second quarter of 2018, down from a weighted average multiple of 2.58x for the same period last year.