For the month of August 2024, the broad benchmark index for insurance-linked securities (ILS) funds, the Eurekahedge ILS Advisers Index, has recorded its highest month-to-month return since its inception in 2006, being up by 1.71% for the month.
It’s testomony to the robust returns being loved by disaster bond and insurance-linked securities (ILS) buyers, as this benchmark of ILS funds has now hit a 7.59% return for the primary eight months of 2024.
By the tip of August 2024, this Index has now reached its third-highest return for this stage of the 12 months, solely trailing final 12 months’s file efficiency and 2007.
August 2024 noticed the disaster bond and ILS funds tracked by the Eurekahedge ILS Advisers Index ship a median return of 1.71%.
With no main disaster occasions that hit ILS positions instantly within the month, the returns generated from premiums and seasonal efficiency have pushed the Index to a brand new excessive for a single month.
ILS Advisers did word that a few of the disaster occasions that occurred might have additional eroded some annual mixture constructions, however this was not ample to dent the month’s stellar ILS fund returns.
The earlier excessive month was a return of 1.60% in January 2007.
Each pure disaster bond funds and the personal ILS funds that additionally put money into collateralized reinsurance or retrocession alternatives achieved their highest returns of the 12 months to date, as a gaggle.
ILS Advisers mentioned that, “Pure cat bond funds as a gaggle had been up 1.61% in August, whereas the subgroup of funds whose methods embody personal ILS gained +1.78%.”
Disaster bond efficiency was notably robust in August, with the Swiss Re International Cat Bond Index seeing a value return of 1.25% and a complete return of two.33% for the month.
Each ILS fund tracked by the Eurekahedge ILS Advisers Index delivered a constructive return for its buyers in August.
As is typical, there was a comparatively wide selection of efficiency, reflecting the broad vary of ILS fund methods accessible to buyers, starting from +0.81% to +2.41% for the month.
With September seeing continued robust seasonality in cat bond efficiency and premium accrual to non-public ILS and reinsurance methods excessive, relying on what occurs because of hurricane Helene (presently there are not any experiences of any important ILS losses) the Index might be in for an additional comparatively robust displaying.
You’ll be able to monitor the Eurekahedge ILS Advisers Index here on Artemis, together with the USD hedged model of the index. It includes an equally weighted index of 27 constituent insurance-linked funding funds which tracks their efficiency and is the primary benchmark that permits a comparability between totally different insurance-linked securities fund managers within the ILS, reinsurance-linked and disaster bond funding area.
