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Cat bond investors received better risk-adjusted rates on new issuances, but lower risk levels meant average spreads fell year on year.
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Losses to the Res Re and Caelus ILS series have narrowed from prior investor expectations.
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Multiple carriers had to revise official terms to get programmes home as reinsurers held firm on price demands.
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Reinsurers have held the line on pricing as cedants seek to close out deals, with the market showing further hardening.
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Reinsurers push back on aggregate exposure from cascading covers as market gets more differentiated.
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Two large ILS managers bucked the trend for alternative retractions, but traditional carriers recorded the fastest expansion.
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Retro deals are seen as a particular concern over growing fears that trapped capital will again be an issue in 2021, as post-2017 innovations will be tested out.
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Investment case is the strongest in more than half a decade, but competition for new inflows is still strong in the buyers’ market.
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Modelling firms said there were too many variables to quantify the impact, but many factors could escalate claims.
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ILS inflows are expected to dry up with some market segments set to be harder hit than others.
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Endowments and family offices have been showing interest in the asset class.
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Spillover from the Covid-19 stock and bond market crashes made for some turbulence towards the end of the quarter despite the impressive volumes issued.