The catastrophe bond market continues to present a compelling investment opportunity, with elevated risk premiums, strong demand from insurers and investors, and favourable pricing dynamics likely to drive record issuance in 2025, according to analysis by Kepler Absolute Hedge, a research and data-led provider of insight into hedge fund strategies.
Cat bonds delivered strong returns in 2024, with the peer group of UCITS funds delivering average returns of around 14%, marking the second consecutive year of double-digit returns following a robust 2023.
According to Kepler, “These returns were delivered despite another year of significant global catastrophes, which although were enough to impair some lower levels of the insurance-linked risk transfer stack, caused relatively de minimis losses for the securitised cat bond space.”
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