The insurance-linked securities (ILS) market is in a strong position with record levels of catastrophe bond issuance and growing interest in private ILS and casualty risks, while transparency and price efficiency remain key to attracting investors old and new, according to industry experts.
As readers of Artemis will be aware, 2025 was a record-breaking year for catastrophe bond issuance, and 2026 has started strongly with all signs pointing to another huge year for the marketplace. At the same time, interest in other forms of ILS and risks outside of the nat cat space are on the rise.
“It’s obviously been a great year last year in the market. If I think about what we’re seeing this year already, I feel like as a law firm, we’re sending out a cat bond quote once a week,” said Brad Adderley, Bermuda Managing Partner at Appleby. “We’re also seeing new lines of risk being included into cat bonds. More than once, we’ve gone to the BMA to ask whether we can add X or Y. It means people are thinking differently, and I’m guessing investors are happy to take on new risk as part of a group of risks.”
Adderley and other roundtable participants also highlighted the growth in private deals, suggesting these are a good way for people to get their feet wet via a cheaper and quicker entry into the market ahead of a full 144A issuance.
“On casualty, we’re seeing no downturn. The interest in casualty is as big as it was this time last year. But it’s also interesting, if you believe the rumours, at some point last year people were talking about $5 billion of casualty deals. How many got done? Not many, three or four. Considering two were done in the first half of the year, that shows how difficult these deals are to get done,” said Adderley.
During the discussion, the maturity and sophistication of the asset class and its investor base was underlined. Although, while it was said that the cat bond product is now somewhat commoditised, it was noted that the market is still not mainstream, with the importance of catastrophe models and the potential for ratings highlighted.
Pehrson stressed that now, with a more refined way of rating cat bonds via Moody’s Analytics, cat bonds should become mainstream and therefore attract new capital and ultimately grow the market further.
“I think there is an enormous amount of interest in investing in ILS, as it is typically not correlated to other asset classes. We have seen in recent weeks how other asset classes have moved due to geopolitical uncertainty. What we’re hearing from our Moody’s Analytics clients is that more conservative investors, or those limited to rated instruments, would be keen on rated cat bonds because of the diversification they provide,” said Pehrson.
For this year’s Artemis Bermuda ILS Executive Roundtable, we were joined by the following participants:
- Brad Adderley, Managing Partner Bermuda, Appleby.
- Christer Pehrson, Global Head ILS Client & Market Development, Moody’s.
- Adam Smith, Partner and Insurance Sector Lead for KPMG Islands Group.
- Adam Champion, EVP, Capital Markets, Price Forbes Re.
- Laura Taylor, President, Nephila Capital.
- Ben Adolph, Chief Underwriting Officer (Non-Life), Leadenhall Capital Partners.
- Niraj Patel, Head of Alternative Capital, AXA XL ILS Capital Management Unit.
We’ll be releasing the full 2026 Artemis Bermuda ILS Executive Roundtable in the coming weeks, so stay tuned to hear more from our sponsors and other expert speakers on these topics and much more, including the need for standardised terms, secondary trading and liquidity, transparency, technology around AI, analytics and models, and the future prospects of the ILS marketplace.
Read reports from previous Artemis Executive Roundtables here.
