Q3 saw $1.4bn of non-life bonds issued

Money, bank, calculator

Catastrophe bond capacity soared in the third quarter of 2013, with $1.4bn of non-life bonds issued, compared with $0.5bn for the same period in 2012, according to Willis Capital Markets & Advisory (WCMA).

Third quarter 2013 catastrophe bond issuance was around three times higher than the five-year average, and was the highest on record since 1998, according to WCMA in a recent report.

WCMA head of ILS Bill Dubinsky said: “If fourth quarter issuance remains at a similar level to that of recent years it will be a record year for ILS issuance, surpassing the 2007 record. Outstanding capacity has now grown in each of the past five years, with the currently outstanding capacity of $17.3bn, representing an all-time high.”

Dubinsky added: “Some investors are encouraging more catastrophe bond issuance so that they can continue to fulfil mandates for liquid investments. Other investors are chasing the illiquidity in collateralised reinsurance as a mechanism to protect themselves from the ruthless price pressure in a well run syndication process.”