Secondary market prices of some catastrophe bonds that provide their sponsors aggregate reinsurance or retrocessional coverage have been increasing at what is viewed as being a faster pace, than is typically anticipated, in recent months, with some sources suggesting a contributor is the fact hurricane season has so far run loss-free in 2025.
A number of aggregate catastrophe bonds have seen their secondary market prices rising over the last two months, some meaningfully so and more than you’d typically expect for the time of year, which has been an additional factor that has helped to boost performance of cat bond investment strategies during the period.
Aggregate cat bonds had seen some heavy mark-downs earlier this year, as well as some losses, as the impacts of the California wildfires in January, as well as the US severe convective storm season, drove prices down as the market’s perception of risk of loss rose for numerous cat bond names.
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