Insurance-linked securities (ILS) continue to stand out as a compelling asset class, not just for their strong returns, but for their unique ability to remain uncorrelated with broader financial markets, according to Mark Gibson, Senior Investment Director, ILS, at Schroders Capital.
The Swiss Re Global Cat Bond Index posted record gains of 17.3% in 2024 and 19.7% in 2023, rebounding sharply after a modest 2.2% decline in 2022.
However, while these figures represent standout years, Gibson notes in an article that since the index’s launch in 2002, cat bonds have consistently delivered performance that has outpaced every asset class except global equities in terms of annualised returns.
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