Alternative capital available in the (re)insurance market has hit $98bn – a record for the sector - according to Aon Securities.
In its latest ILS report, Aon said in the 12 months to June 30 2018, the catastrophe bond market also hit a milestone - reaching a new height of $30bn – an increase of $4.2bn from the prior-year period.
Aon said $9.7bn of catastrophe bonds were issued through 29 transactions in the 12-month period, marking the second-highest issuance figure on record.
While Aon noted that was a decrease of $1.6bn compared to the preceding period – it said the drop should not be confused with a lackluster performance over the period.
The broking house said that while the catastrophes that plagued 2017 brought concern over ILS-related trapped collateral, fund manager demonstrated their ability to successfully reload at renewals.
During this period, Aon said a record level of maturities brought repeat sponsors back to the market while the favourable terms and conditions also prompted several new sponsors to issue bonds.
“In the period under review, the catastrophe bond market experienced growth but capital markets investors continued to access risks through additional channel - collateralised reinsurance, sidecars, start-up vehicles, and managing general agencies,” Paul Schultz, CEO of Aon Securities said.
“This growing capital deployment demonstrates the commitment of the alternative markets to the reinsurance and insurance industries,” Schultz added.