Bermuda reinsurers sponsored $1.37B of cat bonds in a record quarter

Bermuda-based reinsurers sponsored nearly $1.4 billion of catastrophe bonds in the second quarter. That came to about 12 percent of the record volume that moved through the global market. Artemis's latest catastrophe bond and ILS report supplied the figures, as reported by the Royal Gazette.

The quarter's records went beyond the headline. Artemis counted 48 transactions in the three months to June 30. They were divided into 80 tranches. Those transactions delivered $11.3 billion in new risk capital. Nine first-time sponsors entered the market, another record. Repeat sponsors still accounted for most issuance.

First-quarter issuance came to almost $6.7 billion. That lifted first-half volume to $17.98 billion. The total surpassed the $17.6 billion record set a year earlier. The outstanding market reached $65.6 billion at the end of June. That was an end-of-quarter record and a 7 percent increase since the end of 2025. Strong competition among investors gave sponsors more favorable terms and helped drive down the cost of transferring risk, Artemis found.

The Bermuda roster was a familiar one. Everest Re brought two Kilimanjaro III Re transactions. They were worth a combined $630 million. Convex Re sponsored a $175 million Hypatia deal. Arch Capital, XL Bermuda, Ariel Re, The Fidelis Partnership and Oak Re Syndicate 2843 rounded out the quarter's Bermudian-linked sponsors.

Brad Adderley, Appleby's managing partner in Bermuda, told the Royal Gazette that the structures themselves have not changed much. What has changed, he said, is comfort. More sponsors know their way around cat bonds and insurance-linked securities. More investor capital is waiting to be deployed. The mix of risk has widened beyond property catastrophe into cyber and casualty covers. New sponsors face a smoother process, with simpler legal documents and more standardized market language. Returning sponsors are renewing expiring deals.

The combination of record issuance and more favorable terms suggests capital supply is still running ahead of sponsor demand. That dynamic, not any single transaction, is what Adderley describes as momentum. That also leaves Bermuda in a strong position as a domicile. The sponsor list is not captive to local firms. These are international reinsurers that could have structured the deals elsewhere. Their repeated use of Bermuda reflects the island's legal and regulatory infrastructure, and each record quarter reinforces that choice.

Nine first-time sponsors came in this quarter. How many of them return over the next twelve months will matter more than the next record.