The total-return of the excellent disaster bond marketplace for the first-quarter of 2024 has reached 4.57%, in response to knowledge from the Swiss Re Cat Bond Performance Indices, which exhibits that cat bond market efficiency is working barely behind the prior yr.
The truth the efficiency of the cat bond market is working behind that seen in 2023 is not any shock.
While we’re seeing value results once more in 2024, as provide and demand components drove secondary market costs increased, this has not been as vital as the worth results skilled in early 2023, which had been largely pushed by recoveries in worth following hurricane Ian.
As we’ve reported a variety of occasions, an inexpensive proportion of the file disaster bond market efficiency from 2023 got here via recoveries in worth to cat bond positions that had been closely marked down after 2022’s hurricane Ian.
That can’t be repeated, in fact, however value results have been a part of returns earned by cat bond buyers to date in 2024 as effectively, simply not at such a big fee.
By the tip of the first-quarter of 2024, the Swiss Re cat bond complete return index was working up by 4.57%, which we imagine to be the second-best begin to the yr on-record for cat bond market returns, after 2023.
It’s one other very sturdy begin to the yr for disaster bond market returns, which buyers have been benefiting from, as different indices display.
As we reported, disaster bond funds structured within the UCITS format delivered their buyers a median return of three.65% for the first-quarter of 2024, in response to the Plenum CAT Bond UCITS Fund Indices.
The higher-risk group of UCITS cat bond funds achieved 3.76% for a similar interval and the common reached above 4% by April twelfth, the latest knowledge exhibits.
At the second it appears unlikely the Swiss Re cat bond index complete return can equal the very sturdy efficiency from H1 2023, when it reached a ten.34% total-return by the tip of June.
Recall that, as we reported lately, the disaster bond market yield fell to simply under 12% on the finish of March 2024, so the first-quarter return of the Swiss Re cat bond index seems comparatively aligned to that with some value results on prime.
Catastrophe bond market returns proceed to trace at excessive ranges, regardless of the softening of disaster bond issuance spreads, which you’ll see proof of right here in our charts displaying cat bond pricing and spreads, in addition to cat bond multiples-at-market, by years and quarters.
Find all of Artemis’ disaster bond market charts and knowledge right here, or through the Artemis Dashboard.
All of our charts are up to date as new disaster bond points full, and as older issuances mature, primarily based on the information in Artemis’ intensive disaster bond Deal Directory.
