In 2023, catastrophe bond and related ILS issuance hit a new a high of more than $16 billion, rising approximately $5.9 billion year-on-year and beating the previous high by almost $2.4 billion.

More transactions came to market in 2023 than any previous year as repeat, and an impressive number of new sponsors took advantage of favourable market conditions and tapped the capital markets for their reinsurance needs.

Against this backdrop, we spoke with Adderley about the past 12 months and whether the strong momentum will persist amid a still hard market environment.

“I didn’t expect this year to be as busy as it has been, it’s been crazy. I’m not sure anyone thought there was going to be more than 90 deals this year. So, personally, I’m surprised by both the number of deals and the size of total issuance,” said Adderley.

Another first for the market in 2023 was the arrival of cyber risk deals, first via some private placements before the market’s first full 144a cyber cat bonds were issued in the final quarter of the year.

“I’m also pleasantly surprised about cyber. Over the years, we’ve heard many rumours about new risks, but how often did it actually happen? The fact numerous cyber deals have been issued now is only a good thing for the market. And now that cyber has taken off, it shows that it is possible and perhaps people will start looking more seriously at other risks,” said Adderley.

“Developments like the cyber deals, that’s what we need, right. We need something different being done to cat in order to really grow the
market,” he added.

The Artemis Deal Directory already has a number of deals listed that are set to close in January, and from what Adderley has been hearing, the beginning of next year is likely to be busy for the cat bond market as well.

“So, it suggests that this is not a flash in the pan. Ok, 2024 might not be a record year after what we’ve seen in 2023, but if it’s still a really
good year, a busy year, it still builds on the momentum,” said Adderley.

“Add to this the fact I’m still reading and hearing more and more about sidecars and collateralized products, it’s a bit like a snowball effect. The cat bond market is pulling other things into it, which is allowing the entire fully funded space to grow. Which is what we want.

“So, I think next year is going to be really good for the market,” he concluded.

Click here to view the full report.

First Published In Artemis, January 2024

Twitter LinkedIn Email Save as PDF
More Publications
29 Feb 2024 | Publications

Bermuda: Investors still wary of sidecars despite upbeat outlook for 2023 returns

Sidecar vehicles are expected to return on average 20%-30% in 2023, assuming no major loss event in ...

24 Jan 2024 | Publications

Chambers Insurance & Reinsurance Guide 2024: Bermuda

This guide provides the latest information on sources of insurance and reinsurance law, overseas-bas...

11 Jan 2024 | Publications

ILS Steps Up When Needed Most

After a robust 2023 for ILS, five experts in this space debated the changing role ILS is playing in ...

20 Dec 2023 | Publications

Focus on COMI

Schemes of Arrangement are often used as a successful restructuring tool, whether by way of a scheme...

29 Nov 2023 | Publications

G20 Sustainable Finance Initiative and Offshore Green Financing

Green and sustainable finance has been expanding rapidly as investment decisions are increasingly ta...

26 Oct 2023 | Publications

Bermuda: Economic Substance – Trends in Compliance and Enforcement

The Economic Substance Act 2018 came into force on December 31, 2018, pursuant to which Bermuda comp...

2 Oct 2023 | Publications

Expect a Busy Year-End for Cat Bonds and Sidecars

History has shown that in both soft and hard markets, the final quarter of the year is always busy, ...

22 Sep 2023 | Publications

Reinsurance Strategies in a Hard Market

The extent to which improved market conditions for reinsurers will endure and the importance of main...

22 Sep 2023 | Publications

Bermuda’s Catastrophe Bond Market Is Enjoying A Record Year

WILL THERE BE A CLASS OF ’23? Bermuda’s catastrophe bond market is enjoying a record year, bu...

13 Sep 2023 | Publications

Appleby & AGS Are Gold Sponsors of the 62nd World Federation of Exchanges Annual Meeting Held in Bermuda

Leading offshore law firm Appleby, and its specialist trust and corporate services provider, Appleby...