A record $US11 billion ($14.5 billion) of property catastrophe bond limit was placed last year, up sharply from the $US5.4 billion ($7.1 billion) achieved in 2019, according to an insurance-linked securities (ILS) update from Aon.

And in the December quarter, ILS issuance set a new all-time high, at $US3.7 billion ($4.7 billion), representing a $US1.5 billion ($2 billion) increase from a year earlier.

Aon says it expects investor appetite to remain strong in the March and June quarters, since bonds worth about $US2 billion ($2.6 billion) and $US4.3 billion ($5.7 billion) will mature soon.

The total amount of property catastrophe bonds outstanding last year is about 2% higher from $US29.5 billion ($38.8 billion) in 2019.

“[Last quarter’s] steady flow of new issuances of $US3.7 billion… and total annual 2020 issuance, is a confirmation of the resilience of this market, with this positive momentum also anticipated to continue in 2021,” Aon said.

Total issuance last year was made up of 46 property and casualty transactions with an average deal size of $US239 million ($314.5 million).

Repeat sponsors accounted for the majority of transactions in the December quarter while first time sponsors contributed to broader market growth.

Aon says it still sees a preference for cleanly structured deals from high-quality sponsors and investors seem to favour per occurrence over aggregate triggers as a result of the most recent loss events.

Click here for the report.