Insurance-linked Securities - What is the Opposite of a Hype?

Insurance-linked securities  

How losses in cat bonds in 2017 have turned investors away from the asset class, opening up opportunities for contrarian investors



  • Deep losses in September 2017 have led to an exodus of investors from cat bonds. Our hype index for cat bonds now shows a strong negative signal, indicating that cat bonds are currently in the opposite of a hype situation.

  • This opens up opportunities for contrarian investors who can profit from cat bond yields that are substantially higher than yields on similarly rated high yield bonds.

  • We expect cat bonds to significantly outperform their long-term average returns in the next three to twelve months.

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