Low US wind claims bring cat bond prices back up.
Aon Benfield said a calm US wind season has helped cat bond prices rebound, despite dwindling investor interest, Reuters reports.
Cat bond spreads widened sharply ahead of the Atlantic hurricane season, but a benign US wind season has brought prices back to normal market levels, said Aon Benfield in a report.
Double post Katrina level
As of 30 September, 52% of outstanding issuance in the cat bond market related to US hurricane risk, nearly double the 27% seen immediately after 2005's Hurricane Katrina, the insurance industry's most costly natural disaster.
The weighted average price of U.S. hurricane bonds decreased 1.4% during July, while spreads increased 7.7% in the secondary trading market.
Aon Benfield expects more than €500m of Europe Windstorm bonds come to market before the end of 2010.
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