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Property catastrophe bond issuance 'resilient'

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Property catastrophe bond issuance totalled $US2.57 billion ($3.32 billion) in the first quarter, down from a year-earlier but the third-highest for the period over the past decade.

“A total of nine transactions were issued and received healthy support from investors, as 11 of the 13 classes upsized from their guidance,” Aon says in an insurance-linked securities (ILS) quarterly report.

The steady flow of new issuances and anticipated transactions is a confirmation of the market’s resilience, with the momentum expected anticipated to continue for the remainder of the year, Aon says.

Issuance was down from $US3.76 billion ($4.86 billion) in the first quarter last year but up from $US1.45 billion ($1.87 billion) in 2019.

Aon says issuance could not meet the increasing demand and investors turned to the secondary market in search of bonds.

Universal Insurance Holdings issued its first catastrophe bond in the quarter with coverage focused on Florida, while others involved included Sompo Japan, Tokio Marine & Nichido Fire, the US Federal Emergency Management Agency/National Flood Insurance Program and the California Earthquake Authority.