The insurance-linked securities (ILS) market has entered 2026 with significant momentum, driven by an unprecedented surge in catastrophe bond issuance and strong global demand for protection. SCOR Investment Partners believes this robust primary activity will play a critical role in sustaining current spread levels across the market throughout the year.
“January alone brought close to USD 3 billion in new transactions across 9 deals, an unprecedented start that points toward another highly active first half. Broker indications suggest that the pipeline remains robust, raising the possibility that issuance volumes could match or surpass last year’s record of USD 17 billion. This sustained primary activity, supported by strong global demand for protection, should help maintain current spread levels across the market,” SCOR Investment Partners said.
Whilst providing its outlook for the ILS market in 2026, SCOR Investment Partners also noted that on the private ILS front premium rates within both reinsurance and retrocession are expected to adjust downward year on year at the upcoming April renewals in Japan and the June renewals in the United States.
According to the report, this will largely align with conditions that were demonstrated at the recent January renewals, in an environment of abundant available capacity.
Further into its report, SCOR Investment Partners also highlighted the spread developments that were observed within both the primary and secondary market throughout 2025 and into 2026.
“Within the primary market, Spreads have tightened for 2025 issuances, what we are effectively witnessing is a normalization of spreads and multiples. The market has moderated from the unusually high levels seen in recent years and has largely returned to pre‑Hurricane Ian conditions. Levels are broadly comparable to those observed in early 2022 and close to long‑term averages (around 6%),” the report reads.
However, towards the end of 2025, this trend reversed within the secondary market as spreads widened due to a combination of selling flows and seasonality dynamics.
SCOR Investment Partners stresses that the recent spread widening in the secondary market should materialize further as the space approaches the summer months, a trend that was observed in 2023, 2024 and 2025.
“In absolute terms, spreads are also drifting back toward their long‑term equilibrium, signaling a broader normalization of the market and a return to pricing levels last seen in early 2022, before Hurricane Ian reshaped the landscape,” the firm added.
Additionally, SCOR Investment Partners observed how the industry loss warranty (ILW) market reflected similar patterns too, with the firm specifically highlighting how ILWs remained reactive throughout 2025 and pricing trends aligned closely with those observed in cat bonds.
Data in the report also showcases how spreads decreased by roughly 10% in 2025 following the steep increases seen during the 2022 to 2024 period, yet they still stand higher than their 2022 levels.
“Renewals across the broader ILW market generally traded between 10 and 15% lower. Despite the tightening observed in the final quarter, ILW rates ended the year at levels that remain higher relative to long term norms,” the report reads.
The SCOR Investment Partners cat bond and ILS fund platform experienced rapid growth in 2025, with assets under management (AUM) across its three main strategies rising to over US $5 billion at September 30th 2025.
