Catastrophe bond fund news

Yesterday, all of the 1940’s Act registered US mutual investment funds that allocate to catastrophe bonds and other insurance-linked securities (ILS) increased their net asset values (NAV), in some cases recovering a meaningful percentage of the declines recorded due to hurricane Milton.

Most of the 1940’s Act registered US mutual investment funds that allocate to catastrophe bonds and other insurance-linked securities (ILS) reduced their net asset values (NAVs) a little further yesterday as hurricane Milton approached.

Despite the impact of now two US hurricanes that are set to drive losses in the double-digit billions each, being Helene and now Milton, Tanja Wrosch, Head of Cat Bond Portfolio Management at investment manager Twelve Capital has said that catastrophe bond funds can still finish the year positively.

Commenting on hurricane Milton post-landfall, catastrophe bond fund manager Icosa Investments has said that it anticipates the impact to the catastrophe bond market will be below 5%.

Projections for the potential insurance industry loss from hurricane Milton given just a few hours before landfall by two reinsurance broker meteorologists ranged from $15 billion to $40 billion, which appears a reasonable place to begin thinking about the potential quantum of losses set to be experienced.

Hurricane Milton made a damaging category 3 landfall in Siesta Key, Sarasota County last night, which is south of Tampa Bay and so the worst case loss scenarios involving significant storm surge into Tampa metro have been avoided. But, Milton is still a large storm, with widespread hurricane wind speeds and impacts across the entire […]

There is not much else to say on major hurricane Milton, as still uncertainty is high over the eventual quantum of losses the storm will cause in its expected damaging impacts on Florida. But importantly, the insurance, reinsurance, catastrophe bond and insurance-linked securities (ILS) markets will be there to pay claims as and when appropriate.

The net asset values (NAVs) of a number of the 1940’s Act registered US mutual investment funds that allocate to catastrophe bonds and other insurance-linked securities (ILS) declined again yesterday, with some cutting for the second day running, others for the first time.

Analysts at Goldman Sachs believe that a hurricane Milton insurance industry loss of above $25 billion will be sufficient to change the pricing narrative for property catastrophe risks at the end of year reinsurance renewals.

Catastrophe bond fund manager Icosa Investments has published some scenario modelling outputs that show the difference between best and worst case hurricane Milton losses, ranging from industry losses of $15bn to $150bn+, with the hit to the cat bond market anything from zero to as much as 15%.