Catastrophe bond pricing remains firmly in the “neutral zone” according to the latest analysis from consultancy Lane Financial LLC, but the firm maintains its prediction that the market is still on-track for an expected 8.5% total return in 2025.
Lane Financial had forecast earlier this year after Q1 that catastrophe bonds had the potential to deliver a total return of around 8.5% in 2025, even after accounting for an expected level of losses to bonds.
So far, the level of losses (actual and mark-to-market) remains within expectation, for an average year, the consultancy explained in its latest paper, while at the same time price development in the catastrophe bond issuance marketplace remains aligned with Lane Financial’s 8.5% after losses forecast.
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