The current soft market in catastrophe bonds and insurance-linked securities (ILS) is not yet at the depressed levels seen in 2017, analysis from consultancy Lane Financial LLC shows. But the company suggests the soft cat bond market could last another year, if 2026 continues to run loss-free.
In its last analysis of the catastrophe bond market earlier this year, Lane Financial had said that the outstanding market yield of non-impaired natural cat bonds was no longer as soft as it had been at the end of 2025, but the firm also highlighted that investor returns had been eroded by falling secondary market prices.
But the new analysis now shows that prices have continued falling through 2026, resulting in lower weighted average cat bond yields and a multiple across the outstanding non-impaired set of catastrophe bonds of just 1.9 times expected loss.
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