The entire-return of the excellent disaster bond marketplace for the first-quarter of 2024 has reached 4.57%, in keeping with knowledge from the Swiss Re Cat Bond Efficiency Indices, which reveals that cat bond market efficiency is working barely behind the prior 12 months.
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 worth results once more in 2024, as provide and demand elements drove secondary market costs increased, this has not been as important as the value results skilled in early 2023, which have been largely pushed by recoveries in worth following hurricane Ian.
As we’ve reported a lot of occasions, an affordable share of the document disaster bond market efficiency from 2023 got here via recoveries in worth to cat bond positions that have been closely marked down after 2022’s hurricane Ian.
That may’t be repeated, after all, however worth results have been a part of returns earned by cat bond buyers thus far in 2024 as nicely, simply not at such a major fee.
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 consider to be the second-best begin to the 12 months on-record for cat bond market returns, after 2023.
It’s one other very sturdy begin to the 12 months for disaster bond market returns, which buyers have been benefiting from, as different indices exhibit.
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 keeping 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 common reached above 4% by April twelfth, the latest data shows.
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 10.34% total-return by the end of June.
Recall that, as we reported recently, the catastrophe bond market yield fell to just below 12% at the end of March 2024, so the first-quarter return of the Swiss Re cat bond index seems comparatively aligned to that with some worth 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 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’ catastrophe bond market charts and data 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, based mostly on the information in Artemis’ extensive catastrophe bond Deal Directory.
