Best’s Market Segment Report: ILS Capacity Grows Modestly, as Catastrophe Bond Issuance Breaks Record
The capacity level in the insurance-linked securities (ILS) segment continues to grow at a modest pace, mostly aligning with market demand as opposed to exceeding it, according to a new AM Best report. In addition, AM Best estimates the property catastrophe bond market at approximately
The Best’s Market Segment Report, “ILS Capacity Grows, as CAT Bonds Issuance Breaks Record,” is part of AM Best’s look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in
At year-end 2023,
“One year of great returns is probably not enough to draw in material amounts of new capacity that would significantly soften the market,” said Emmanuel Modu, managing director, insurance-linked securities, AM Best.
The report also notes that the 144A property catastrophe bond market broke its single quarter issuance record in second-quarter 2024, with issuance of nearly
Risk-adjusted rate changes in the ILS segment were flat to slightly down overall at mid-year renewals. Rate decreases in the more risk-remote layers of reinsurance towers were more pronounced, but rates tended to rise slightly at the lower layers of the tower, where capacity is scarcer. The dampened rate activity was not unexpected given the strong returns achieved by traditional reinsurers and ILS managers in 2023, as well as the lack of a major peak-peril catastrophe event since Hurricane Ian in 2022.
“Barring a major peak peril loss event in 2024, cedents will have more room to negotiate at the
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=345768.
For future global reinsurance reports ahead of Rendez-Vous de Septembre, please visit Best’s Research.
Lastly, AM Best will host its annual reinsurance market briefing at Rendez-Vous de Septembre on
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240819825581/en/
Emmanuel Modu
Managing Director,
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Senior Director,
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Director, Market Development
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Source: AM Best
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