More than $2 billion in catastrophe-bond maturities are not expected to impact the overall size of the market as new money funneling in should keep the industry growing, according to a Guy Carpenter report.
The report says more than $711 million in risk capital matured in 2012's first quarter. But the quarter also saw a record $1.34 billion in new bonds issued.
Guy Carpenter's report notes that four programs matured in the quarter:
- Groupama sponsored a $136 million bond covering French windstorms.
- SCOR sponsored three tranches covering U.S. hurricane and earthquake totaling $200 million.
- Chubb sponsored a $150 million bond covering Florida hurricane risks.
- Liberty Mutual sponsored a $225 million tranche covering U.S. hurricane and earthquake.
For all of 2012, a total of $2.51 billion is scheduled to mature. Of that amount, $1.44 billion will mature before June 30. But risk capital outstanding increased by more than 5 percent in the first quarter to $12.77 billion, says Guy Carpenter—and this trend is expected to continue.
Pricing and capacity in the traditional reinsurance market, as well as catastrophe activity, will affect bond issuance going forward, Guy Carpenter adds.
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