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No cat bond loss from Hagibis, price impacts to be short-lived: Plenum


Specialist catastrophe bond and insurance-linked securities (ILS) investment manager Plenum said that Japanese typhoon  Hagibis won’t be severe enough to trigger any cat bond losses and that any secondary market price impact will be short-lived.

typhoon-hagibis-satellite-japanThe Zurich based specialist ILS and catastrophe bond fund manager Plenum Investments has a long track record in managing cat bond assets and so a well-developed and diversified portfolio.

As a result, when any major catastrophe event occurs, Plenum typically has a good view on whether an event has been severe enough to threaten any of the cat bonds in its portfolio.

Soon after typhoon Hagibis made landfall, Plenum communicated to investors and the market that given the storm looks to have been more of a flooding event, financial losses from it are not expected to reach the levels that would be required to trigger any of the cat bonds the manager holds in its funds.

In addition, Plenum said that any secondary market price reactions from Japan typhoon exposed cat bonds are likely to be short-lived.

That means any mark downs of Japanese typhoon cat bonds that occurred on Friday while typhoon Hagibis was approaching will likely be recovered in full today, with trading market desks now open again.

Despite the fact cat bonds are expected to be unaffected by Hagibis, the insurance and reinsurance market will likely face a loss of some significance, especially as the storm came so soon after typhoon Faxai.

Also read: Hagibis to add “enormous complication” so soon after Faxai: RenRe CEO O’Donnell.

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