The catastrophe bond sector experienced a record year in 2021. During the year, 45 different bonds were brought to the 144A market for over USD 11.5 billion in limit placed, taking the total outstanding notional amount to over USD 31 billion.
In view of constrained retrocessional capacity, global reinsurers found industry loss index-based multiyear, multiregion and multiperil aggregate covers available in the bond market to be especially attractive. Over 70% of the limit placed had an indemnity-trigger structure, with the balance coming from industry loss index and parametric structures.
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