A recent paper from investment manager Neuberger Berman highlights catastrophe bonds as a “very compelling opportunity” for investors seeking genuine portfolio diversification, which comes at a time when macroeconomic uncertainty and risk-asset volatility are expected to remain in focus for the foreseeable future.
The investment manager observes that demand for catastrophe bonds has continued to grow as investors continue to recognise the diversification benefits that they offer.
Simultaneously, sponsors have also come to value capital markets as a reliable and complementary source of capacity, typically sitting alongside traditional reinsurance, the firm noted.
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