Cat bonds lift ILS market – AM Best

Catastrophe bonds are a bright spot in the insurance linked securities market in 2023, lifting the segment’s capacity by about $3 billion to the mid-year point of 2023, according to AM Best, 

In a study published in Bermuda:Re+ILS’s special report released today,  Emmanuel Modu and Matthew Tuite report that private funds have also been performing well so far this year, “with cumulative returns hitting record highs during mid-year, which has not been seen in over a decade”.

“Global insured natural catastrophe losses in 2023 are on pace to exceed the $100 billion threshold, driven mainly by severe convective storms in the United States,” the report says. “However, ILS market participants feel some optimism because the US hurricane season has been relatively mild from an insured loss perspective, with Hurricane Idalia, estimated at $2 to 5 billion of insured losses, as the most notable landfall through September. 

“Relatively lower US hurricane losses may give the property cat market the respite it needs to attract more investors while maintaining pricing discipline.”

For the full report, click here