Catastrophe bond issuance in the fourth quarter of 2013, USD1.82 billion, was minimally offset by the limited amount of catastrophe bond maturities of USD360 million, resulting in a net change of risk capital outstanding of USD1.46 billion.
Recent and upcoming scheduled maturities by peril are shown in Table 1 below. Significant capital will be available as a result of an above average volume (based on principal amount) of maturities scheduled for the first and second quarters of 2014, which should result in a sponsor-friendly environment as investors look to redeploy capital quickly.
As a result of the positive net change in risk capital outstanding, total risk capital outstanding at the end of 2013 reached an all-time high of USD18.58 billion, which is an estimated 16 percent of global property catastrophe limit purchased annually. Given the large amount of scheduled maturities in the first quarter of 2014, risk capital outstanding may decrease until new catastrophe bond issuances occur in 2014.
Note: 1. Source: GC Securities Proprietary Database (P&C catastrophe bonds as of December 31, 2013 excluding private transactions)
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