Reflecting the flexibility of nearly all of the market to soak up initial mark-to-market losses from hurricane Milton inside just numerous weeks, the broad benchmark index for insurance-linked securities (ILS) funds, the Eurekahedge ILS Advisers Index, delivered a positive 0.81% return for the month of October 2024.

Every ILS fund tracked by the Index delivered a positive return for the month, which is sort of remarkable when you concentrate on the loss event hurricane Milton had been feared to be.

With hurricane Milton making landfall on October ninth, this shows just how rapidly ILS fund managers developed their views on potential impacts from the loss event and reversed many initial mark-downs, to finish the month positively.

While Milton was estimated to be a big insurance and reinsurance industry loss ($20bn to $60bn), ILS Advisers noted that, “emerging claims data suggest that losses are more likely to fall toward the lower end of this range.”

Overall, ILS Advisers said that hurricane Milton will only have “limited impact” on the ILS funds sector, despite being a big event for the broader insurance market.

“Losses are anticipated to affect only select junior structures, with the broader ILS market remaining largely insulated,” the corporate explained.

To this point, for 2024, the Eurekahedge ILS Advisers Index is at its third-highest level of return, for the primary 10-months of any 12 months.

Were it not for spread effects that dented May’s performance after which Milton in October, then this Index would undoubtedly be at its second-highest level, only trailing last 12 months at this stage and sure trailing 2023 by lower than one percent.

With the general catastrophe bond market delivering a 0.97% total-return, in keeping with reinsurance firm Swiss Re’s Index, it’s no surprise that pure catastrophe bond funds averaged a powerful 0.84% for October, in keeping with the ILS Advisors Index.

Meanwhile, the private ILS fund strategies tracked by the ILS Advisers Index, so those funds that invest across ILS instruments including collateralized reinsurance and retrocession, delivered a rather lower 0.81% average return for October 2024.

With every ILS fund tracked by the Index positive for the month, the bottom performer got here in at just +0.01%, while one of the best performing ILS fund returned 0.97%.

The year-to-date return for this ILS fund Index now stands at 10.5% after October.

November might be a comparatively strong month as well, especially given there might be some recovery of value after Milton marks from October.

This Index remains to be heading in the right direction for its third, or perhaps second best annual performance on-record, depending on how strong the last two month’s of the 12 months are.

You possibly can track the Eurekahedge ILS Advisers Index here on Artemis, including the USD hedged version of the index. It comprises an equally weighted index of 26 constituent insurance-linked investment funds which tracks their performance and is the primary benchmark that enables a comparison between different insurance-linked securities fund managers within the ILS, reinsurance-linked and catastrophe bond investment space.