ILS and cat bond rates rise slightly in Q4 2012: Report

The average rate-on-line of insurance-linked security and catastrophe bond deals rebounded slightly in the fourth quarter of 2012 after declining significantly through to the end of the third quarter of 2012, according to cat bond and reinsurance consultancy Lane Financial L.L.C.’s Q4 ILS market report.

The synthetic rate-on-line index rose just over 2% in the fourth quarter, likely due to Superstorm Sandy, which saw investors demanding a slightly higher premium for their investments. Another reason for the bounce back could be that the market recognized pricing had reached a new low for the last two years.

Many observers expect low rates to continue as capital interest from investors in ILS remains high.

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