The third quarter tends to be slow for the catastrophe bond issuance market, given that it falls in the middle of hurricane season. This year, however, is a bit different.
According to data from the Artemis Deal Directory, so far this quarter, sponsors have completed seven transactions representing more than $1 billion in new limits. Last year, approximately $800 million came to market across four transactions. Three transactions completed in third-quarter 2013 use the PCS® Catastrophe Loss Index, representing $450 million in capital.
Part of the reason for the high level of third-quarter issuance is that sponsors announced several transactions covering U.S. wind in the second quarter and completed early in the third.
As for the rest of the year, fourth-quarter issuance activity is likely to be on the table in Monte Carlo next month as cedents and reinsurers mark the informal start of the march to the January 1, 2014, reinsurance renewal.