The catastrophe bond market is forecast to have the potential to deliver a total return of around 8.5% in 2025, even after accounting for an expected level of losses to bonds during the year, according to consultancy Lane Financial LLC.
Pricing in the catastrophe bond market is said to be “slouching just south of neutral,” according to the latest report from Lane Financial.
This means, cat bond pricing, for the outstanding stock of 144A natural catastrophe insurance-linked securities (ILS), sits just below neutral as of the first-quarter of 2025, but still some way above what the consultancy would consider a true soft market.
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