The entire-return of the excellent disaster bond marketplace for the first-quarter of 2024 has reached 4.57%, in line with knowledge from the Swiss Re Cat Bond Efficiency Indices, which reveals that cat bond market efficiency is working barely behind the prior yr.
The actual fact the efficiency of the cat bond market is working behind that seen in 2023 is not any shock.
Whereas we’re seeing value results once more in 2024, as provide and demand components drove secondary market costs greater, this has not been as important as the value results skilled in early 2023, which had been largely pushed by recoveries in worth following hurricane Ian.
As we’ve reported plenty of instances, an inexpensive share 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 may’t be repeated, after all, however value results have been a element of returns earned by cat bond buyers up to now in 2024 as properly, simply not at such a big charge.
By the tip of the first-quarter of 2024, the Swiss Re cat bond whole 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 reveal.
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 line with the Plenum CAT Bond UCITS Fund Indices.
The upper-risk group of UCITS cat bond funds achieved 3.76% for a similar interval and the typical reached above 4% by April twelfth, the most recent knowledge reveals.
In the mean time it appears unlikely the Swiss Re cat bond index whole 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 not too long ago, the disaster bond market yield fell to only beneath 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 high.
Disaster bond market returns proceed to trace at excessive ranges, regardless of the softening of disaster bond issuance spreads, which you’ll be able to 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.
Discover all of Artemis’ disaster bond market charts and knowledge right here, or by way of 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’ in depth disaster bond Deal Listing.
