Catastrophe bonds and insurance-linked securities news

Yesterday saw a number of the 1940’s Act registered US mutual investment funds that allocate to catastrophe bonds and other insurance-linked securities (ILS) declining, presumably as asset managers cut their net asset values (NAV’s) on the potential for losses from hurricane Milton.

Hurricane Milton is now a Category 4 storm with sustained winds of 155 mph at the latest NHC update. With the central pressure now estimated at 933 mb and a track that will see Milton getting very close to the northern Yucatan peninsula, it has brought the Class C notes of the IBRD CAR Mexico […]

We understand from sources that, as early as yesterday, some catastrophe bond and insurance-linked securities (ILS) investment fund managers began exploring their options to free up cash from their portfolios in order to be ready for any potential losses, or to take advantage of market opportunities that emerge, due to now major hurricane Milton.

As hurricane Milton heads towards Florida, the developing storm situation poses the biggest potential threat to the insurance-linked securities (ILS) market since hurricane Ian in 2022, according to Florian Steiger, the CEO of catastrophe bond investment manager Icosa Investments AG.

CoreLogic has now updated its insurance market loss estimate for hurricane Helene to include losses to the National Flood Insurance Program (NFIP), now putting the total in a range from $10.5 billion to as much as $17.5 billion.

Investment manager Amundi US has continued to attract capital to its most recently launched dedicated insurance-linked securities (ILS) fund strategy, as the Pioneer CAT Bond Fund has now reached $426 million in assets, now roughly tripling in size over the course of 2024 so far.

Aon has announced a key change in its insurance-linked securities (ILS) and investment banking business leadership, as Richard Pennay has been named the new CEO of Aon Securities and Paul Schultz moves to become Global Vice Chair of Reinsurance at the company.

Here’s a reminder to register for our upcoming live insurance-linked securities (ILS) focused webinar on October 31st 2024, in which our industry expert speakers will explore the state of the catastrophe bond and broader ILS market, as well as the outlook for 2025.

In the month of September 2024, the overall yield of the catastrophe bond market declined further as the effects of hurricane seasonality accelerated, while also adding to the decline is a gradual reduction in the cat bond market collateral yield, as lower interest rates begin to have an effect.

In conversations with sources in the reinsurance, catastrophe bond and insurance-linked securities (ILS) investments space, it seems some nerves are beginning to emerge over hurricane Helene’s potential to attach certain contracts, as data points begin to suggest a growing claims burden that could result in industry losses creeping higher.