The global insurance-linked securities (ILS) market has sustained its strong momentum from last year, recording $US1.7 billion ($2.26 billion) of bond capacity via five deals in the first quarter, according to Willis Towers Watson Securities.

There were nine transactions worth $US2 billion ($2.66 billion) in the corresponding period last year.

“The ILS market is firing on all cylinders... a record year seems possible,” Willis Towers Watson says. “There is a robust pipeline, with nearly a record level of deals completed.

“ILS funds are raising capital and putting it to work.

“Sponsors are responding to the attractive spread environment by seeking new protection backed by liquid ILS, as well as continuing to ramp up protection in other forms.”

XL Bermuda sponsored issuance worth $US525 million ($701.5 million) to cover tropical cyclones and earthquakes in Australia and similar weather risks in the US and Europe.