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Issuance volumes of cat bonds fell in the 12 months to June 30, 2018, but this is not a true reflection of the market’s inherent robustness as it continues to mature and evolve, according to Aon’s latest ILS report.
While catastrophe bond issuance fell in the 12 months to June 30, 2018, this should not be confused with any indication of a weakness in the market, a new insurance-linked securities (ILS) report by Aon, Alternative Capital Fortifies its Position, has argued.
Some $9.7 billion of cat bonds were issued in the period, a decrease of $1.6 billion over the preceding period.
The report, written by Paul Schultz, chief executive of Aon Securities, argues that this dip in issuance should not be confused with a lacklustre performance in the period. It notes that the period included issuance not only from repeat sponsors looking to renew maturing bonds, but also from new sponsors testing the capital markets for the first time. In addition, the capital markets welcomed new perils from new geographies, providing diversification to the broader market.
Aon, report, Paul Schultz, ILS, 2018