The insurance-linked securities (ILS) market grew 5% to $US93 billion ($129 billion) outstanding non-life capital last year, Willis Re says.

Catastrophe bond issuance remained strong, with about $US9.2 billion ($12.8 billion) in new capital marking the second-best year after the 2017 record of $US9.7 billion ($13.5 billion).

Of $US535 million ($747 million) in bonds issued in the fourth quarter, $US125 million ($174 million) was for California wildfire protection, $US200 million ($279 million) was multiperil and $US210 million ($293 million) related to US earthquakes.

Willis Re says dividing lines between categories in the ILS market are blurring as participants look to the range of tools available to meet specific challenges, develop new solutions and refine structures.

“The overall ILS figure is today a much more meaningful measurement of market size than focusing on cat bond and sidecar issuance alone,” Willis Towers Watson Securities MD and Head of ILS William Dubinsky says.

Willis Re says ILS or alternative capital under a broad definition is essentially capital other than common equity invested in “promise to pay” insurers and reinsurers.

Following this broader definition would yield a much larger market figure than the $US93 billion ($129 billion) estimate, which does not include some areas that are more difficult to track consistently and accurately.

“Sometimes the boundaries between traditional insurance and reinsurance equity capital and alternative capital blur too, as insurers and reinsurers strive to become more efficient in the solutions they can deliver,” Willis Re says.