Hurricane Ian Fallout Will Test Catastrophe Bond Investor Appetite

Fitch Ratings Report

Date:

Autor: Funds Society, Miami

the ILS market will assume a fair share of losses from Ian, with Fitch estimating total insured losses of $35 billons.-$55 billons., second only to Hurricane Katrina at $65 billons ($90 billions. in 2021 dollars)

Since 2017, with insured losses from Hurricanes Harvey, Irma and Maria, the number of cat bonds not returning full principal to investors totals 55 individual tranches with either a full or partial loss to investors, a dramatic increase compared to 75 tranches in totality since 1990

Fitch rates two catastrophe bonds, Stratosphere Re Ltd., 2020-1 and Long Point Re IV Ltd., 2022-1 which are not at risk of principal loss given the former’s structural features and the latter’s predominantly northeast U.S. insured property value