The second quarter of 2013 saw $2.2 billion of non-life catastrophe bonds issued through 14 tranches (representing 10 deals), compared with $2.1 billion issued in the same period last year, with 12 tranches (representing 7 deals), according to Willis Capital Markets & Advisory (WCMA), part of Willis Group Holdings.

This follows a strong first quarter in which the market saw $1.6 billion of issuance, and brings total non-life capacity issued for the year so far to $3.8 billion, according to WCMA in its latest 'Insurance Linked Securities' (ILS) report.

Elsewhere in the report, WCMA asks how far the cat bond and collateralized reinsurance market could expand beyond its mainstay of natural catastrophe perils. "To continue the same pace of growth we have seen in the last few years the ILS market will need to accept a growing pool of perils," according to Bill Dubinsky, Head of ILS at WCMA.

"Some of these new perils are evolutionary—such as earthquake risk in areas such as Colombia, Chile, Israel and even China. Others may represent a more radical departure from market norms. For example, will investors accept standalone U.S. terrorism risk if TRIPRA is not renewed? Will casualty risk finally become more at home in the capital markets?"

Offering a prediction for the year ahead, Dubinsky continued: "Our current best estimate for where the ILS market will end up in terms of issuance at the end of the year is $6 to $7 billion in non-life issuance (excluding private deals). If sponsors accelerate deal execution into 2013 that would otherwise have occurred in 2014, exceeding $7 billion seems quite possible.

"Of course sponsors, the majority of whom are insurers, will be watching the Atlantic and elsewhere to see what surprises Q3 2013 brings,” Dubinsky said. “A major storm or earthquake causing significant insured losses could change things very quickly."

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