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Climate change, variability and the expected increases in Atlantic hurricane risk that these factors will drive, is still likely to be compensated for in catastrophe bond and private insurance-linked securities (ILS) coupons, as pricing should rise and consequently returns, in line with the risk, according to ILS manager Twelve Capital.
Twelve Capital, the Zurich headquartered insurance sector specialist fund manager, works with machine learning focused climate technology company, reask on hurricane risk analysis. The pair have looked at how climate change and climate variability will influence the market and impact portfolios of ILS or cat bonds.
They expect we will see a “modest increase in Atlantic hurricane risk over the forthcoming decades as a consequence of climate change.”