Catastrophe-Bond Funds See Risk Premiums Rising After Milton

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(Bloomberg) -- The cost of issuing catastrophe bonds looks set to go up, as asset managers who specialize in the securities react to the fallout from Hurricane Milton...

Though cat-bond portfolios will likely see a much smaller dent than initially estimated after Milton, every loss withdraws risk-bearing capital from the market and reduces reinsurance capacity, Plenum Investments Ltd. told investors in an emailed update on Saturday..

As a result, risk premiums in the cat-bond market are likely to increase again from whats already an historically high level, it said...

Current estimates show that the cat-bond market looks to have dipped just 1.34%, according to Artemis, which cited end-of-week pricing calculated by Swiss Re Capital Markets..

While cat-bond investors look to be facing minimal losses after Hurricanes Helene and Milton, the picture on the ground remains dire for millions of people...

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