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Cat bond market remains soft, Lane Financial flags another year risk

Lane Financial data show the multiple of non-impaired cat bonds at 1.9 times expected loss, down from 1.7 in early 2017.

Reported · Written up by our desk · Reinsurance

Artemis, citing analysis from consultancy Lane Financial LLC, said the catastrophe bond and insurance-linked securities market is still in a soft phase that has not yet returned to the more depressed conditions seen in 2017.

Lane Financial suggests the current softness could persist for another year if 2026 continues to run loss-free, while also pointing to investor returns being pressured by falling secondary-market prices.

The latest update shows prices have continued falling through 2026, which has lowered weighted average cat bond yields and the multiple across the outstanding non-impaired set of catastrophe bonds to 1.9 times expected loss.

In the first quarter of 2017, that same measure fell to 1.7, the lowest in the dataset that begins in 2005, and Lane Financial said it adjusted its approach to isolate the impact of expected loss fluctuations over time.

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