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Industry loss cat bonds show significant relative value: Twelve Capital

Given spread widening has been seen to be more considerable with index-linked, or industry loss triggered, catastrophe bonds, compared to indemnity deals, investment manager Twelve Capital says there is significant relative value in them and as a result it advises being overweight to the index trigger cat bond category.

Twelve Capital, the Zurich headquartered investment manager with a focus on insurance-linked securities (ILS), insurance and reinsurance linked investments, explained in a recent report that spread widening has affected the industry loss index trigger catastrophe bonds more than indemnity deals.

As a result of which, the index-trigger cat bonds are seen as a well-priced opportunity to buy and hold at this time.


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