Catastrophe bond news

Speaking with a number of reinsurance buyers regarding their outlooks for January 2025 renewals, it’s clear most are resigned to attachment points remaining at or near the more elevated levels set in recent years, but they are hopeful that aggregate coverage will become more available, especially from the capital markets.

Florida’s Citizens Property Insurance Corporation, the state’s insurer of last resort, is currently projecting a need to budget for a larger tower of reinsurance and catastrophe bonds in 2025, with almost $4.5 billion of risk transfer being discussed.

Investing in insurance-linked securities (ILS) has been beneficial for Australian investment firm MLC Asset Management, with its ILS portfolio delivering an average return of 7.6% per annum across the last 17 years, Head of Alternatives Gareth Abley has said.

The World Bank is working with four countries from the Organization of Eastern Caribbean States Commission (OECS), Dominica, Grenada, Saint Lucia, and Saint Vincent and the Grenadines, to strengthen their climate resilience and with three risk transfer options being explored, a catastrophe swap, catastrophe bonds, or securing more parametric insurance.

RenaissanceRe has for a second time increased the target size for its latest catastrophe bond, with the company now seeking $350 million of multi-peril retrocessional reinsurance from the Mona Lisa Re Ltd. (Series 2025-1) issuance.

Here are the ten most popular news articles, week ending December 1st 2024, 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.

The California Earthquake Authority (CEA) did not come back to the reinsurance market at its typical October 1st renewal, allowing roughly $511 million of cover to expire and it now expects to re-evaluate its risk transfer need at the January renewals, meaning a $215 million catastrophe bond will likely mature without renewal later this month.

Reflecting the ability of the majority of the market to absorb initial mark-to-market losses from hurricane Milton within just a number of weeks, the broad benchmark index for insurance-linked securities (ILS) funds, the Eurekahedge ILS Advisers Index, delivered a positive 0.81% return for the month of October 2024.

The stable return profile of catastrophe bonds and their historically low correlation with broader financial markets have traditionally been the main reasons investors considered an allocation of cat bonds into their portfolio, however, more recently, investors have started recognising catastrophe bonds for their social impact, as per a new report from the Man Group.

The group of catastrophe bond funds in the UCITS format have already reached a year-to-date return of 12.1% by November 15th, as the Plenum CAT Bond UCITS Fund Indices continues to demonstrate the very attractive returns possible from cat bond investments.