Hannover Re continued to grow the volumes of its activities as a key insurance-linked securities (ILS) market facilitator in 2025, with securitised reinsurance volumes expanding and collateral furnished for fronted ILS arrangements growing as well.
It’s role ranges from acting as sponsor of securitized risk transfer transactions for its own retrocession and for clients, as a risk-sharing partner aligned with third-party investors through its K-Cessions quota share sidecar, as a facilitator that helps cedants access capacity from the capital markets, and as a fronting partner to institutional investors or ILS funds to help them source risk.
In catastrophe bonds, Hannover Re assisted in the transfer of risk to the capital markets, acting as a ceding reinsurer, across 12 transactions in 2025.
Limit transferred across these 12 cat bond transactions reached EUR 3.4 billion in 2025, which the company said was unchanged from the prior year.
In 2024 the total for cat bond deals Hannover Re had assisted in was said to be around US $4 billion across 13 deals, while in 2023 it was $2.8 billion.
Collateralised reinsurance, where Hannover Re assists as a facilitator or provides fronting for investors and ILS funds, remains by far the largest segment of its ILS, collateralised and securitised activities, the reinsurer reported.
The collateralised reinsurance business remained stable in 2025, on a high level, Hannover Re explained.
The reinsurance firm reports a number of metrics that help to drive home the importance and stature of its position as a facilitator in ILS markets, with significant volumes of limit and collateral across the securitised risk sharing and collateralised reinsurance fronting activities it undertakes.
On the K-Cessions quota share, which acts as a kind of sidecar structure for Hannover Re, while the arrangement increased in size by more than 31% to US $964 million for 2026, the company reported that of the US $735 million size for 2025 some EUR 425.8 million was securitised via structured entities.
Through its Kaith Re Ltd. structure, which is used for private collateralised reinsurance and private cat bond issuances, as well as other retrocessions and ILS arrangements, and other structured entities Hannover Re reports that the ceded exposure limit of underlying transactions reached EUR 9.3239 billion at Dec 31st 2025, which was up meaningfully from EUR 7.6869 billion a year earlier.
That shows still expanding ILS facilitation activity, particularly on the securitised side of the arrangements Hannover Re enters into to support its clients, as well as ILS investors and fund managers.
In pure collateralised fronting arrangements, another form of ILS activity undertaken by Hannover Re, the ceded exposure limit of the underlying retrocession agreements stood at EUR 5.3725 billion at Dec 31st 2025, down slightly from the end of 2024 EUR 5.4025 billion.
This is the area Hannover Re noted as relatively stable year-on-year, but the securitised limit shows ILS activities generally still rising for the company.
A final metric Hannover Re reports, is the amount of collateral furnished by ILS funds and investors to support the potential reinsurance obligations of ILS arrangements and fronted participations, with this rising to almost EUR 7.4 billion by the end of last year, up from almost EUR 7.19 billion a year earlier.
Of course, in the last year Hannover Re has also expanded its ILS activities with the launch of a new manager structure in Bermuda.
The reinsurer recently launched its Bermuda-based insurance-linked securities (ILS) platform, Hannover Re Capital Partners, and started writing business at the January 1st, 2026, reinsurance renewals.
That new venture promises to further expand the reinsurer’s key role in ILS markets, providing another source of valuable income against the risks being shared.
On income, Hannover Re does not report any single metric that reflects the fee income being earned from all of its collateralised, securitised and fronted ILS related activities, but given the size of the volumes being facilitated it is safe to assume this is a meaningful addition to the firm’s annual income.
Finally, Hannover Re also noted that during 2025 “increased capacity also became available from the insurance-linked securities (ILS) markets, which appreciably stepped up the competitive intensity.”
But, the reinsurer notes ILS market growth should be positive for the company, given the important role it has created for itself.
“In business with insurance-linked securities (ILS), we anticipate rising demand over the long term as investors seek greater diversification of their investments. We respond to this need by offering individually tailored solutions for the transfer of property and life reinsurance risks to the capital market,” Hannover Re said.
