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The pricing of recent industry index catastrophe bond issues have been at levels last seen prior to hurricane Ian, leading broker Aon to suggest “a quantifiable return to pre-Ian pricing dynamics” has occurred.

In its latest reinsurance reports, the broker highlighted the softening of the catastrophe bond market. It also detailed the return of growth in the ILS market as alternative capital in the reinsurance market grew to a high of $100 billion.

It’s been clear that catastrophe bond pricing has come off the highs seen earlier this year, something we’ve discussed in our analysis and that you can see in near real-time, as new cat bond issuances are completed, in our charts.

Although our data shows cat bond average spreads to be lower today than they used to be, the averages across all market issuance are still relatively high.

Aon, however, believes that when you examine discrete deals, like some industry index transactions there is evidence of the return to pricing levels before hurricane Ian caused its losses in the reinsurance markets.

“While catastrophe bond returns remain relatively strong in 2023, investors are having to contend with tighter spreads,” the broker explained in its new reinsurance market report.


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