Global annual catastrophe bond issuance totalled $US7 billion ($9.95 billion) in the year to June 30, according to an Aon Securities report.

The figure is down on last year’s record-breaking $US9.4 billion ($13.36 billion) but is the third-highest annual issuance in the sector’s history.

Aon’s report – Insurance-Linked Securities: Alternative Markets Adapt to Competitive Landscape – shows 25 transactions closed and $US5.9 billion ($8.39 billion) of bonds matured in the year.

The year included a record first-quarter issuance of $US1.7 billion ($2.42 billion) and a record average transaction size of $US279 million ($396.5 million).

American exposures continued to dominate the catastrophe bond market, with 22 of the 25 transactions comprising US risk.

Dedicated Japanese risk was covered in two transactions and standalone European risk in one.

Aon expects current pricing trends to continue this year “in the absence of substantial catastrophic events that disrupt the supply of capital”.