Given the softening of reinsurance rates and compression in risk spreads across catastrophe bonds and insurance-linked securities, the expected return of ILS investments is generally at a lower level, but private bank and asset manager VP Bank AG has noted that the risk premium available to investors is still attractive.
VP Bank has been recommending catastrophe bonds and ILS investments since 2022, when it saw the post-hurricane Ian market environment as an opportunity.
The Liechtenstein-based private bank and asset manager continues to see ILS as an asset class to remain neutral on at this time, maintaining allocations at this stage of the market cycle.
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