Cat bond news

The Bermuda Stock Exchange (BSX) has maintained its position as the leading exchange in the world for the listing of insurance-linked securities (ILS) instruments in 2024, with roughly 92% of outstanding catastrophe bond issuance finding a home there as of the end of the year.

Insurance-linked securities (ILS) fund managers delivered another positive month of returns to their investors in November 2024, with the average return of the Eurekahedge ILS Advisers Index reaching 1.03% on the back of positive returns for each of the 26 ILS fund strategies it tracks.

A number of catastrophe bonds have experienced negative secondary market price movements due to potential exposure to aggregate attachment erosion, or actual losses, from the Los Angeles and Southern California wildfires. Here we detail a number of the biggest movers, based on information seen and conversations with sources in the cat bond market.

Evercore ISI analysts have updated their estimate of the potential insurance and reinsurance market impact from the Los Angeles and Southern California wildfires, saying they believe the total could reach $20 billion to $25 billion, higher if the situation does not improve, while also suggesting the fires may be treated as one event for reinsurance […]

Gallagher Re is the first reinsurance broker to publicly provide a provisional industry loss estimate for wildfires impacting the Los Angeles and Southern California region, saying that total aggregated insured losses, largely from the Palisades and Eaton fires, are “expected to notably exceed USD10 billion.”

Here are the ten most popular news articles, week ending January 12th 2025, covering catastrophe bonds, ILS, reinsurance capital and related risk transfer topics. To ensure you never miss a thing subscribe to the weekly Artemis email newsletter updates or get our email alerts for every article we publish.

Insurer Mercury General Corporation has said that it expects the ongoing wildfires in Los Angeles, California will result in losses for the company that will exceed its reinsurance retention of $150 million.

2024 was another record issuance year for the catastrophe bond market and with total alternative reinsurance capital reaching new heights, the way insurance-linked securities (ILS) managers and investors matched appropriate risk returns was a notable success, according to Bill Dubinsky, Managing Director and CEO of Gallagher Securities.

With loss estimates for the Los Angeles, California wildfires having risen, there is now likely to be “considerable attachment erosion” for some aggregate catastrophe bonds that hold exposure to the wildfire peril, Florian Steiger, CEO of Icosa Investments AG has said.

High-demand for catastrophe bond investments has compressed risk spreads somewhat, resulting in the overall yield of the catastrophe bond market falling back into single digits at 9.94% by the end of December 2024, according to the latest data from Plenum Investments.