Bermudian-based reinsurers sponsored nearly $1.4 billion of catastrophe bonds during a record-breaking second quarter.

A new report from Artemis found that investor capital helped drive down the cost of transferring insurance risk.

A record 48 transactions comprising 80 tranches brought more than $11.3 billion of new risk capital to the global market during the three months to June 30, according to the latest catastrophe bond and insurance-linked securities report from Artemis.

Bermudian-based or Bermudian-connected sponsors accounted for approximately $1.37 billion of the total, or about 12 per cent.

Everest Re brought two Kilimanjaro III Re transactions worth a combined $630 million to market, while Convex Re sponsored a $175 million Hypatia transaction.

Other Bermudian-linked sponsors included Arch Capital, XL Bermuda, Ariel Re, The Fidelis Partnership and Oak Re Syndicate 2843.

Brad Adderley, Appleby’s Bermuda managing partner, said more familiarity with cat bonds was encouraging more sponsors to use the market.

“I don’t think there’s anything fundamentally different in the structures,” Mr Adderley said.

“I think the market is going to continue to gain further momentum simply because more people are becoming comfortable with cat bonds and insurance-linked securities.”

He added: “There is a lot of investor capital out there waiting to be deployed, and we are seeing a steady influx of new sponsors.

“On top of that, market participants are increasingly mixing different types of risks together. A few years ago, we primarily saw property catastrophe deals dominate the space, but now we are regularly seeing cyber and casualty risks being introduced.

“What is really driving this momentum is that people are getting comfortable and the market itself is becoming mainstream.”

Nine first-time sponsors entered the market during the quarter, another record, although repeat sponsors continued to account for most issuance.

Mr Adderley said new sponsors are getting a smoother and more streamlined process than was available when the market was less developed. He said simpler legal documents and market language were also helping companies understand what to expect.

“As a direct result of that success, we are seeing more sponsors reliably returning to the market to renew their expiring deals,” he said.

The second-quarter record followed issuance of almost $6.7 billion in the first three months of the year. That lifted first-half issuance to $17.98 billion, surpassing the previous record of $17.6 billion set last year.

The outstanding cat bond market reached $65.6 billion at the end of June, an end-of-quarter record and an increase of 7 per cent since the end of 2025.

Strong competition among investors also gave sponsors more favourable terms. Sixty of the 70 tranches for which Artemis had full pricing data closed with spreads below the midpoint of their initial guidance.

The average spread above expected loss, fell to 3.74 per cent, its lowest quarterly level since early 2023, more proof of softening across the broader reinsurance market.