Cat bonds continue to exceed market expectations


Cat bonds continue to exceed market expectations

Florian Steiger, executive director, cat bonds strategy at Twelve Capital

For those seeking shelter in times of economic volatility, catastrophe bonds offer plenty of diversification. Twelve Capital’s Florian Steiger discusses how this is leading to a boom in interest in the sector.

With most parts of the global economy entering recession in the past 12 months, thanks to the restrictions imposed as a result of COVID-19, investors increasingly considered the makeup of their portfolios and examined the notion of diversification.

In fact, in times of such widespread economic turbulence, true diversification can be extremely hard to find. One investment that indisputably offers this, however, is insurance-linked securities (ILS), bonds linked not the performance of a company or government, but to insurance risk, most commonly the probability of natural phenomena such as earthquakes or hurricanes occurring.

That increased interest by investors in seeking true diversification was one of the reasons for the accelerated growth of Twelve Capital’s UCITS catastrophe bond fund over the last three years.

Twelve Capital, Cat bonds, COVID-19. Insurance, reinsurance, ILS, Florian Steiger, Global

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