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Cat bond market’s use of industry loss triggers likely to persist: Johansmeyer, PCS

As the catastrophe bond market continues to deal with the effects of the 2022 Atlantic hurricane season, Tom Johansmeyer, Head of PCS, Verisk Insurance Solutions, expects demand for industry loss triggers to persist for some time.

“Given the impacts of Hurricane Ian on the market and the fact that they will continue through 2023, use of PCS triggers in cat bonds is likely to continue. And the trend is bolstered further by the losses going back to 2017,” said Johansmeyer in a recent interview with Artemis.

“The big question is whether ILW transactions will move into the cat bond market, as we saw in 2021 with some of the global products, or whether the cost and availability of capital will result in a narrower focus for most transactions, as has been the case with the PCS-triggered cat bonds we’ve seen in the fourth quarter of 2022,” he continued.


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