The first quarter of 2013 saw $1.6 billion in new catastrophe bond issuance through five deals, including three that closed at the beginning of the second quarter, according to new a report from Willis Group Holdings PLC’s Willis Capital Markets & Advisory (WCMA) unit.The first-quarter issuance compares with eight deals that brought $1.3 billion in capacity to the market during the first three months of 2012, the report said.“The growing capital inflows into the (insurance-linked securities) space suggest that the current drop in ILS pricing may be a long-term feature of the market,” Willis said in the report.“Both generalists and ILS specialists are putting more money to work.”Much of that money is being put to work right here in Bermuda.“Almost all major Bermuda reinsurers, except one, have third party capital initiatives in place.“We may be witnessing the moment when the capital markets have moved from the sideshow to the main tent.”The first-quarter deals covered US windstorm and earthquake exposures.Willis added that it expects the catastrophe bond pipeline to convert into a record issuance over the course of the rest of the year.“After a slow start, 2013 is roaring forward with a flurry of cat bond, sidecar, and collateralised reinsurance activity,” commented Bill Dubinsky, Head of ILS at WCMA.“Collectively, capital markets insurance capacity significantly outsizes the surplus of the leading non-life reinsurers, excluding Berkshire Hathaway.”The Willis report said 2013 catastrophe bond issuance may outpace 2012’s $5.9 billion, the second-highest annual issuance to date. 2007 was the largest year, when $7.2 billion in cat bonds were issued.“A reaction in some quarters is to dismiss the recent capital markets growth as unsustainable.“This is a convenient reaction for those who see the world changing around them and are perhaps in denial,” the report said.“That said, it might of course be true that some investors will enter and exit over time.“That is simply a sign of a healthy mature market.”