Catastrophe bond issuance down by 20% in first nine months of 2015

Catastrophe bonds issued in the first nine months of 2015 were down by 20 percent compared with the same time period in 2014, to approximately $4.5 billion according to the Artemis.bm Deal Directory.

This was a slight improvement on the first half’s year-over-year decline of 28 percent due to the fact that three small transactions were closed in July 2015, while none were completed in the third quarter last year.

However, despite this decline in capital raised, issuance frequency is up slightly from the first nine months of 2014. Sponsors completed 20 transactions in the first nine months of 2015, up 11 percent year over year, with the number of deals exposed to North American risks up from 14 to 16.

The data is reported in the latest Property Claims Services (PCS) report Dog Days of Summer: PCS® Q3 2015 Catastrophe Bond Report. It also found that only four catastrophe bonds came to market in the third quarter and it was the second consequrive quarter than no index triggers were used, after a strong first quarter for them.

According to the report, the cat bond lite market continued to push forward, despite the traditional catastrophe bond market being fairly quiet, with four transactions leading to approximately $94 million in new limits. The triggers for three were undisclosed, with the fourth, Dodeka VII, using the PCS Catastrophe Loss Index.

The flurry of July activity brought the year-to-date publicly revealed total to $490 million across 16 transactions, which is twice the full-year 2014 total.