Chicago
31 January 2018
Reporter: Jenna Lomax

Cat bonds reach record $10.7bn issuance in 2017


Catastrophe bonds representing a record combined total capacity of $10.7 billion were issued in 2017, according to Aon Insurance-Linked Securities (ILS) report.

Aon’s ILS year-end 2017 update report revealed that during a historic 2017, 35 cat bonds were issued by 31 different sponsors.

After $8.6 billion of cat bonds were issued in the first half of 2017, a series of catastrophe events influenced the pricing of certain cat bonds.

Issuance dropped to $0.8 billion in Q3 2017, but the market overcame these challenge in the approach to the end of the year with new capital entering the sector and issuance in Q4 was up to $1.3 billion.

As of 31 December 2017, the capacity of cat bonds active in the market totaled $25.7 billion and alternative capital reached $89 million–both were new records.

The report predicts the ILS market will carry much of its momentum into 2018 and forecasts cat bond issuance of between approximately $8 billion and $9 billion for the year.

Aon Securities’ CEO, Paul Schultz, stated: “The ILS market had a very strong 2017, with several new records being set and alternative capital rising to new heights in the reinsurance marketplace.”

“We expect to see a gradual broadening of the scope of ILS products, making them an even more common risk transfer tool for re/insurers, with continued support from investors for this diversifying asset class.”

More news
The latest news from Captive Insurance Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Funds approved for ‘crumbling foundations’ captive
21 February 2018 | Connecticut | Reporter: Ned Holmes
The Connecticut State Bond Commission has approved $350,000 to set up a non-profit captive insurer, which is a state government solution for an issue impacting a reported 5000 homes in the state
Crawford launches workers compensation service
20 February 2018 | Atlanta | Reporter: Ned Holmes
Crawford & Company has expanded its service portfolio in Australia to include workers’ compensation.
Kansas to alter captive laws
20 February 2018 | Kansas | Reporter: Ned Holmes
The Kansas state government has submitted a bill to update and modernise captive insurance laws in the state
ZIC and Zale Life ratings downgraded
19 February 2018 | New Jersey | Reporter: Ned Holmes
A.M. Best has downgraded the financial strength rating of Zale Indemnity Company (ZIC) and its wholly-owned subsidiary, Zale Life
Tax shelter micro captives bubble set to burst, says Adkisson
16 February 2018 | Las Vegas | Reporter: Ned Holmes
The tax shelter micro captive bubble is set to burst in 2018, resulting in large numbers of such companies to surrender their licenses, as many did last year, predicts Jay Adkisson, partner at Riser Adkisson
Leadership shuffle at Captive Resources
15 February 2018 | Illinois | Reporter: Ned Holmes
Group captive insurance consultant Captive Resources has appointed former Zurich North America CEO Mike Foley to its board of directors
Vermont proposes branch captive legislation updates
14 February 2018 | Montpelier | Reporter: Becky Butcher
Vermont has proposed to update its branch captive legislation to require branch captives to designate the state’s commissioner of the Department of Financial Regulation as its agent for service of process