While the catastrophe bond market has been first to experience investor-demand and capacity driven softening, as spreads have increasingly tightened on primary issues over recent months, this isn’t yet reading across to the entire collateralized reinsurance market at the mid-year renewal season, we’re told.
2021 has seen a significant upwell in demand from investors for new catastrophe bond investments, which has driven strong execution and keen pricing to the benefit of sponsors, but resulted in year-on-year softening in that market.
As we’ve been explaining over recent weeks, spread tightening in the catastrophe bond issuance market has now driven multiples to levels last seen in 2019.
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