Analysis

The asset class is finding favour particularly with allocators that have been watching returns play out over the long-term horizon.

A trend for slightly riskier bonds has brought with it a rise in the absolute margin on offer.

The cat bond market is thought likely to receive an outsized portion of any capital inflows.

Beazley executives spoke of further growth prospects in the class, after its results revealed a 79% combined ratio for its cyber division in 2022.

A canvass of Lloyd’s market executives generated an expected combined ratio of 92%-93% for 2022.

Reinsurer-owned ILS platforms were challenged to grow fee income in a tough year for nat cat losses and as cat market economics shifted.

The reinsurer said in its Q4 earnings call that Argo’s takeover further diversifies its operations and adds a foundational piece to its expanding P&C activity in the US.

The two top-performing funds in 2022 were interval funds.

Following rate increases at 1 January, projected fund returns for 2023 are up several points year on year, with a boost also from higher Treasury rates.

Early evidence is leading the (re)insurance market to hope the storm can avoid the development curve of its 2017 predecessor Hurricane Irma.

The headline market drop in AuM belies a more lively growth story for funds operating outside of the ILS major league.

Beazley’s bond was hailed as a “great first step” but challenges remain, although others are already working on narrower cloud outage transactions.