The common return of insurance-linked securities (ILS) funds tracked by the Eurekahedge ILS Advisers Index reached 1.16% for January 2024, which was a “notably excessive” efficiency for what is commonly a slower month missing in peak peril seasonality.
With this Index having delivered a return for full-year 2023 of 14.11%, the brand new yr has began off notably effectively although, beating another January since 2007.
Particularly sturdy demand for disaster bonds has continued to drive cat bond costs and subsequently fund returns larger than maybe anticipated for the time of yr.
That helped pure cat bond funds outpace the non-public ILS funds that spend money on collateralised reinsurance and retrocession, for the primary month of the yr.
The Eurekahedge ILS Advisers Index returned 1.16% for January 2024, however pure cat bond funds did barely higher than the common at 1.2%.
The non-public ILS fund cohort returned a mean of 1.13% for the month, with no main disaster loss impacts to dent efficiency.
Consequently, the entire ILS funds represented within the ILS Advisers Index delivered a constructive return for the month.
ILS fund efficiency ranged from +0.34% to +1.89% for January 2024, whereas the general Index return was the very best for any January since 2007.
This exhibits that ILS and cat bond returns stay close to the highs achieved a yr in the past, though it’s going to be attention-grabbing to see how this develops throughout the yr.
ILS Advisers famous that January was an excellent month to begin the yr, for ILS buyers.
“That is notably excessive for a month which bears much less pure disaster danger because the wind-storm danger is low right now of the yr,” the corporate defined.
You possibly can observe the Eurekahedge ILS Advisers Index right here on Artemis, together with the USD hedged model of the index. It contains an equally weighted index of 27 constituent insurance-linked funding funds which tracks their efficiency and is the primary benchmark that permits a comparability between completely different insurance-linked securities fund managers within the ILS, reinsurance-linked and disaster bond funding house.