rates

Having forecast that the catastrophe bond market could turn neutral towards the end of 2021 earlier this year, the latest data from Lane Financial shows that rate trajectory did pull-back in the final quarter of the year, with the year ending in relatively muted fashion.

The hard market in catastrophe bonds and insurance-linked securities (ILS) continued to weaken through the second-quarter of 2021, leading consultancy Lane Financial LLC to warn that pricing may return to neutral through to the end of the year.

Artemis’ data shows that robust investor demand for traditional 144A catastrophe bond-linked returns resulted in strong pricing execution for sponsors of transactions in the first-quarter of 2021, a trend that has continued into Q2.

There is evidence that the hard market in catastrophe bonds and insurance-linked securities (ILS) may be coming to an end, as data suggests that softening may finally have begun and could continue if 2021 remains loss free, according to consultancy Lane Financial LLC.

As expected, the catastrophe bond hard market persisted through the final quarter of 2020, but the year “went out with an ILS whimper” according to consultancy Lane Financial, as insurance-linked security (ILS) rates-on-line went sideways.

Catastrophe bond and insurance-linked security (ILS) rates-on-line retreated during the third-quarter of 2020, as the expected effects of seasonality hit one of the market benchmarks, the synthetic ILS rate-on-line Index calculated by Lane Financial.

Catastrophe bond and insurance-linked security (ILS) rates-on-line continue to accelerate away as the hard market persists, rising another 11% in the second-quarter of 2020, according to the synthetic ILS rate-on-line Index calculated by Lane Financial.

Catastrophe bond and insurance-linked security (ILS) rates-on-line were up by a huge 13% in Q1 2020 and have risen by 56% since the end of 2016, as measured by the synthetic ILS rate-on-line Index calculated by Lane Financial.

Insurance-linked securities (ILS) and catastrophe bond investors who cashed-out their holdings during March, as the world’s financial markets declined in the face of the Covid-19 coronavirus threat, are likely to return and may bring more investors with them, Lane Financial LLC believes.

Catastrophe bond and ILS rates-on-line, as measured by a synthetic Index calculated by Lane Financial, rose 2% in the final quarter of 2019, as insurance-linked securities (ILS) remained in hard market territory and yields returned to levels seen earlier in the year.