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Cat bond issuance sets record in Q2

Catastrophe bond issuance has climbed to record levels, driven by renewals and new sponsors entering the market, according to the latest Aon Securities report.

Issuance reached $US6.38 billion ($8.04 billion) across 20 transactions in the three months ended June, surpassing the previous quarterly record of $US4.49 billion ($5.66 billion) in the corresponding period of 2014.

The sharp jump took first-half issuance to $US8.55 billion ($10.78 billion), topping the previous record annual issuance of $US8.38 billion ($10.57 billion) in 2007.

“We saw a large amount of maturing limit being renewed, which contributed to the record-breaking issuance figures,” Aon Securities CEO Paul Schultz said.

“However, there was still a significant expansion in the overall market, as a result of new sponsors, favourable pricing, and the ability of alternative capital to provide high levels of market capacity.”

All Aon insurance-linked securities (ILS) indices posted gains in the quarter, with the All Bond index rising 1.06% and the US Hurricane Bond index up 1.14%.

The Aon ILS indices performed with mixed results relative to benchmarks.

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