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Still a flood: alternative capital sets record

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The reinsurance industry held a record $US98 billion ($138 billion) in alternative capital at June 30, driven by investor appetite for catastrophe bonds, Aon Securities says.

Concerns that investors would flee after last year’s string of unprecedented natural disaster losses proved unfounded.

Overall catastrophe bond issuance reached $US9.7 billion ($13.6 billion) from 29 transactions in the year to June 30, including a record $US3.6 billion ($5.1 billion) in the March quarter.

“The [year] is most noted for the resilience demonstrated by the investment community as investors reloaded capital bases following the catastrophic events at the tail end of [last calendar year],” the Aon Securities market update says.

“Contributing to this strong year were not only repeat sponsors looking to renew maturing bonds, but also new sponsors testing the capital markets for the first time. 

“In addition, the capital markets welcomed new perils from new geographies, providing diversification to the broader market.”