Net new issuance of insurance-linked securities totalled $2 billion in the first three months of this year — the most for any first quarter in history.

The figures from the ILS market update from Willis Capital Markets & Advisory, the investment banking arm of insurance broker and risk adviser Willis Towers Watson, suggests the ILS market is warming up again after a year of slower growth in 2015.

Bermuda has become the leading global centre for ILS issuance, since the Bermuda Monetary Authority created a regulatory framework for special purpose insurers, used as vehicles for ILS, six years ago.

According to Bermuda Monetary Authority data, ILS issued from Bermuda represented 69 per cent of the world’s $26.3 billion in total outstanding ILS capacity, as of the end of last year.

WCMA said ILS issuance, through nine transactions and 13 tranches, was up 35 per cent on the first quarter of 2015.

According to the report, all first-quarter issuances came from repeat sponsors.

WCMA reported: “Other than the Japanese bonds Akibare Re and Aozora Re, the first quarter was dominated by US transactions offering healthy returns to investors. Merna Re 2016-1 was the only US transaction paying a coupon lower than 5 per cent.”

The Merna catastrophe bond, sponsored by US insurer State Farm and listed on the Bermuda Stock Exchange, covers some types of US earthquake risk.

Bill Dubinsky, head of ILS at WCMA, said: “The headline figure shows that a record level of nonlife ILS was placed during the first-quarter, highlighting the continued appetite for risk from investors and alternative reinsurance capital from ceding companies.

“Nonetheless, it is too early to say whether the strong first-quarter issuance will translate to a record-breaking year.”

The report also highlights how ILS funds and ceding companies are providing more information on the catastrophe modelling used to price cat bonds in response to demands for greater transparency from the pension funds who invest in them.