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The catastrophe bond market continues on its positive trajectory in 2024, with robust demand on both sides of the trade, but with spreads and yields having become more “normalised” in recent months, cat bonds are now much more attractive to potential sponsors, Florian Steiger, CEO of Icosa Investments has said.
Cat bond prices have moderately increased due to the significant demand from investors for catastrophe bonds in both primary markets and secondary markets so far this calendar year.
But, despite this, Steiger of Icosa Investments notes that spreads are still “significantly above their long-term average,” which he believes means 2024 will have a “continued positive outlook for the remainder of the year.”
This increased demand has negated the typical off-season effects, allowing investors to make excess returns above what is considered an acceptable risk premium.
Steiger further explained, “The mentioned price increases have normalised spreads in the cat bond market over the past months. The record-high level of last year ,…
