In 2023, catastrophe bond and related ILS issuance hit a new a high of more than $16 billion, rising approximately $5.9 billion year-on-year and beating the previous high by almost $2.4 billion.

More transactions came to market in 2023 than any previous year as repeat, and an impressive number of new sponsors took advantage of favourable market conditions and tapped the capital markets for their reinsurance needs.

Against this backdrop, we spoke with Adderley about the past 12 months and whether the strong momentum will persist amid a still hard market environment.

“I didn’t expect this year to be as busy as it has been, it’s been crazy. I’m not sure anyone thought there was going to be more than 90 deals this year. So, personally, I’m surprised by both the number of deals and the size of total issuance,” said Adderley.

Another first for the market in 2023 was the arrival of cyber risk deals, first via some private placements before the market’s first full 144a cyber cat bonds were issued in the final quarter of the year.

“I’m also pleasantly surprised about cyber. Over the years, we’ve heard many rumours about new risks, but how often did it actually happen? The fact numerous cyber deals have been issued now is only a good thing for the market. And now that cyber has taken off, it shows that it is possible and perhaps people will start looking more seriously at other risks,” said Adderley.

“Developments like the cyber deals, that’s what we need, right. We need something different being done to cat in order to really grow the
market,” he added.

The Artemis Deal Directory already has a number of deals listed that are set to close in January, and from what Adderley has been hearing, the beginning of next year is likely to be busy for the cat bond market as well.

“So, it suggests that this is not a flash in the pan. Ok, 2024 might not be a record year after what we’ve seen in 2023, but if it’s still a really
good year, a busy year, it still builds on the momentum,” said Adderley.

“Add to this the fact I’m still reading and hearing more and more about sidecars and collateralized products, it’s a bit like a snowball effect. The cat bond market is pulling other things into it, which is allowing the entire fully funded space to grow. Which is what we want.

“So, I think next year is going to be really good for the market,” he concluded.

Click here to view the full report.

First Published In Artemis, January 2024

Twitter LinkedIn Email Save as PDF
More Publications
21 Feb 2024

Bermuda Privacy Law Compliance: Pitfalls to Avoid

Although members of the Chamber are aware that Bermuda’s Personal Information Protection Act, 2016...

19 Feb 2024

Bermuda: An Introduction to Dispute Resolution in 2024

International business is the primary area of economic activity in Bermuda, as a result of not just ...

15 Feb 2024

Preserving wealth in a Bermuda dynastic trust

The Vanderbilt family gained prominence through shipping and railroad empires and eventually various...

8 Feb 2024

Bermuda’s promising telecommunications future

Last year was a stellar one for Bermuda’s positioning in the global array of telecommunications se...

25 Jan 2024

Fund Finance Laws and Regulations 2024 – Bermuda

The Bermuda fund industry sees investment predominantly from North America and Europe, and therefore...

24 Jan 2024

Chambers Insurance & Reinsurance Guide 2024: Bermuda

This guide provides the latest information on sources of insurance and reinsurance law, overseas-bas...

23 Jan 2024

New Limitations on the Length of Stay for Visitors to Bermuda

In November 2022, The Minister of Economy and Labour, the Hon. Jason Hayward, JP, MP, announced that...

18 Jan 2024

Technology Experience a Must for Board Composition

Corporate governance is an enterprise-wide endeavour that addresses all aspects of an organisation. ...

11 Jan 2024

ILS Steps Up When Needed Most

After a robust 2023 for ILS, five experts in this space debated the changing role ILS is playing in ...

10 Jan 2024

The Global – your offshore corporate law questions answered

The Global is Appleby’s quarterly collection of expert insights and analysis on the latest develop...