Catastrophe bond issuance reached a record $US6.3 billion ($7.9 billion) in the second quarter as insurers continued flocking to alternative capital to protect against risks, according to Willis Towers Watson’s market update.

The quarter may represent a “critical juncture” for the industry and long-term impact of insurance-linked securities (ILS) capital, it says.

“As we have suggested as recently as last quarter, many reinsurers have and will successfully partner with ILS capital, as well as technology, to benefit their customers and shareholders now that standing still seems fruitless,” the market update says.

“We… may look back and see [the second quarter] as the death knell of the traditional property cat reinsurance model.”

There were 36 tranches in the second quarter, with two of the biggest bond transactions involving issuers Kilimanjaro II Re and Ursa Re.