mikeledray /
9 July 2014ILS

Eight first time sponsors enter ILS space in 2014

Eight first time sponsors entered the cat bond market this year, as the sector posted a first half year record for issuance, topping $5.7 billion in total capital.

According to figures provided by PCS, this was a 40 percent increase in issuance from 2013’s first half year, with 16 cedants putting together 18 transactions during the period.

Of the transactions, 14 covered North American risks and two Japanese risks.

The average transaction size increased to $317 million – up 35 percent on the previous year – but there were significant outliers at both ends of the capital spectrum.

The latest Everglades Re transaction closed at $1.5 billion, making it the largest cat bond transaction in history, while a number of cat bond lite transactions completed including the small Market Re deal, valued at $10 million.

Florida cedants continued to dominate the field with the market sourcing $750 million of capital for Florida risk, through the Armor Re, Gator Re, two Citrus Re and a second Sanders Re transactions. If you include the Everglades Re deal in the mix, Florida’s appetite for convergence capacity is immediately apparent.