Global outstanding insurance-linked securities (ILS) reached a historic high of $US21 billion ($23.4 billion) at the end of last year after $US1.9 billion ($2.1 billion) in bonds was issued in the fourth quarter, according to a Bermuda market report.

The amount of ILS bonds issued for the quarter was unchanged from the corresponding period of 2012, but gained 11% compared with the third quarter.

“ILS issuance closed out the year on a strong note, with annual issuance volume growing for a fifth consecutive year,” the Bermuda ILS Market Report says.

The fourth-quarter issuance more than offset two bonds with a notional amount of $US357 million ($397 million) that matured during the period.

Bermuda accounted for more than two-thirds of global issuance in the fourth quarter and 44% of the outstanding volume in the market. Last year it surpassed the Cayman Islands as the leading jurisdiction by number of deals and total volume.

Global issuance grew 21% to $US7.6 billion ($8.5 billion) last year after a gain of 28% in 2012, but the average size per deal fell 8% to $US207 million ($230 million).

The ILS market represented only 4% of total reinsurer underwriting capacity globally last year, despite continued growth in the sector, the report says.

“The majority of ILS cover North American perils, which account for 59% of the total outstanding volume.”