Commenting on hurricane Milton post-landfall, catastrophe bond fund manager Icosa Investments has said that it anticipates the impact to the catastrophe bond market will be below 5%.The company explained, “Current estimates for insured losses from Milton are between 20 and 60 billion USD.However, this range is still subject to significant uncertainty, and figures could shift as more data becomes available in the coming weeks.Based on these loss estimates, we expect losses for the cat bond market of below 5%.

“A temporary markdown in Friday’s valuation is likely due to the ongoing uncertainty.“The reduced retention levels for aggregate bonds will also play a temporary role in performance and needs to be monitored going forward.” The company added that, “With these still significant losses for the reinsurance industry, premiums are expected to remain elevated or even rise further in the coming weeks.This creates an attractive entry point for investors in the cat bond market.” CEO of Icosa Investments Florian Steiger also said, “Although it might not feel this way to the people in Florida facing extreme devastation from Hurricane Milton, the situation is a marked improvement compared to earlier concerns of a direct hit on Tampa as a potential Category 4 hurricane, which could have resulted in far higher insured losses than are now anticipated.

From a cat bond investment perspective, this event will likely keep us engaged for some time, as loss reports from individual cedants begin to emerge in the coming weeks.“While insured losses will still be substantial — likely well into the double-digit billion range — a further hardening of the reinsurance market seems possible.This will likely drive reinsurance premiums higher, including in the cat bond market.

With the primary market season now underway, it will be interesting to see how these dynamics unfold.Additionally, topics such as “loss creep” and “attachment erosion” will be crucial in the coming months, as they may significantly influence ultimate loss estimates and payout structures.” As we reported earlier, .Other catastrophe bond market sources we’ve spoken to this morning are suggesting that losses to cat bonds will fall in the low single digit percentage of the market, so perhaps the lower-half of a 0% to 5% range.

Time will tell.Things should get clearer over the coming days and loss ranges will narrow somewhat.– .

– .– .– .

– .– .– .

– .– .– .

– .– .– .

– .– .– .

– .– .– .

– .– ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.