Catastrophe bonds and insurance-linked securities news

The effects of spread widening in the catastrophe bond market are now evident in the performance of the Eurekahedge ILS Advisers Index for April 2024, as private ILS funds outpaced cat bond strategies for the first time this year.

Recent “signs of hardening” in the catastrophe bond and insurance-linked securities (ILS) market have driven spreads back to their highest level in months, which investment manager Twelve Capital notes “highlight the prospects for potentially prolonged attractive spreads,” and makes for an interesting entry point to ILS for investors.

After a successful foray into the catastrophe bond market in 2023 with the $100 million Stabilitas Re Ltd. (Series 2023-1) transaction, Bermudian reinsurer Conduit Re continues to explore the space, according to CEO Trevor Carvey.

Icosa Investments AG, the Swiss catastrophe bond focused investment manager, has announced the hiring of Stefan Haring as its first Head of Investment Analytics & Technology and a new strategic partnership with Munich-based asset manager finccam investment GmbH.

Twelve Capital, a Zurich-headquartered insurance and reinsurance focused investment manager, has announced a key hire for its catastrophe bond team, with former Credit Suisse ILS employee Tanja Wrosch joining to head up portfolio management for cat bonds.

Tenax Capital, the London based hedge fund investment manager that operates a UCITS cat bond strategy, has analysed what it calls the “unusual” peak in volatility seen in recent weeks, which has resulted in the net risk margin gap widening between various perils.

UBS Hedge Fund Solutions, a division of UBS Asset Management focused on managing and advising on a range of alternative assets for clients, has recommended maintaining exposure to insurance-linked securities (ILS), but in what could be a nod to hurricane season forecasts, noted that weather analysis is key around the reinsurance renewals this year.

Today, Artemis’ data and charts on the catastrophe bond and related insurance-linked securities (ILS) market have been updated to accommodate the latest new Marlon deal and we’ve now cleared the $4 billion milestone for May 2024, while year-to-date issuance is tracking 38% ahead of the previous record for the first five months.

The landscape of insurance-linked securities (ILS) fund products is relatively broad and diverse, even though the majority of ILS funds are crowded into similar sizes and target similar levels of risk, meaning that, for investors, there is value in considering multiple ILS allocations, according to SIGLO Capital Advisors AG.

In commenting on the recent successful issuance of a $175 million Atlas Capital DAC (Series 2024-1) catastrophe bond, the second from that Irish special purpose vehicle, SCOR’s CFO and Deputy CEO François de Varenne has highlighted the “efficiency gains made.”