ILS funds face mark-down risk due to US wildfires, European floods

Insurance-linked securities fund managers are expecting some aggregate deductible erosion of certain ILS or catastrophe bond positions due to the major cat losses from the July floods in Europe and intense wildfire season in the U.S., Artemis reported. Although the events do not pose any particular threat to either of the financial instruments, ILS fund managers are closely monitoring pricing to understand the impact.