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Risk adjusted cat bond yields seven times higher than 2016: Twelve Capital

Specialist insurance-linked securities (ILS) and reinsurance investment manager Twelve Capital believes the catastrophe bond investment opportunity to be particularly compelling for 2023.

Higher pricing of reinsurance and retrocession, alongside stricter documentation of coverage in cat bonds, means the sector has about the highest return potential in its history.

These factors “Make the current environment an interesting entry opportunity for investors,” Twelve Capital explained.

A significant pipeline of maturities means those cat bonds with widened spreads that do not end up facing any losses are likely to mature close to their par valuations.


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