Asia offers many opportunities for the ILS market: Sangiorgio, Twelve Securis

As Twelve Securis continues to expand its presence across Asia, which includes setting up two new distribution partnerships in Taiwan, Vittorio Sangiorgio, who serves as Head of Investment Solutions at the specialist catastrophe bond and insurance-linked securities (ILS) investment manager, has emphasised how the region offers many opportunities for the ILS market to further expand and grow.

During a recent interview with Artemis, Sangiorgio outlined where Twelve Securis sees the greatest potential in terms of attracting institutional capital and broadening distribution for catastrophe bonds across Asia.

“If you look geographically, there are a number of key areas in the region we are particularly active. We have South Korea, Japan, Taiwan, Hong Kong, Singapore, and Australia. I won’t go into too much detail on Australia because it’s already a significant market. It’s one of our largest markets for cat bonds and ILS and one of the key markets for Twelve Securis. The market is mature and investors are already understanding the asset class,” Sangiorgio explained.

“Out of the various other countries that I mentioned, I think there is a very positive usage in Japan, particularly for catastrophe bonds. The Japanese market is less keen on private ILS structures because they had maybe not the best of experiences in 2017. But cat bond interest is growing and increasing,” he continued.

“I think the other two markets where there’s a fair amount of interest is the one of family offices in Singapore and Hong Kong. A newer asset class, you start there from a much lower level because allocation is small for the time being, and also there is an educational path to go through with investors, but we definitely see good potential there, particularly towards cat bonds.”

We recently reported that Twelve Securis had set up new distribution partnerships in Taiwan with Concord Capital Management, and Uni-President, as the ILS manager continues to expand its presence across Asia’s institutional markets.

In light of this, Sangiorgio shared with Artemis what the current sentiment among Taiwanese institutional investors is in regards to ILS, and whether they appear to be showing a stronger preference for public cat bonds or private ILS strategies.

“I think there are two types of clients. There are the large institutional investors, and in general they already have allocations to ILS, specifically cat bonds. Then there are the wealth management channels, and this market is still at a younger stage of development at this point. There has not been much commercial activity from ILS managers in this segment, and it’s specifically due to the fact that it’s relatively complex market to get in with a relatively high barrier to entry, and you need to partner with somebody locally if you want to access this market,” the executive said.

He continued: “So the potential is definitely there, but it’s also the first steps for investors to familiarise with the asset class. In Taiwan we have Concord Capital Management, which is a sub-distributor for several of our products. We don’t only focus on catastrophe bonds, as we also promote multi-strategies combining insurance bonds, insurance equities and cat bonds, insurance fixed income products, and mixed ILS. We really try to cover all possible angles with them.”

“We also have another sub-distribution partner in the region for a bespoke Cat Bond product. So we have two entryways into the market, Concord with a broader offering, and the second partner, Uni-President, with a dedicated offering.”

Ultimately Twelve Securis hopes these distribution partnerships in Taiwan help drive further ILS penetration across Asia.

Comparing Asia to some of the European markets, Sangiorgio emphasises that European markets are fairly saturated these days, stating that they tend to have more players, as well as a growing interest in ILS.

“There are also existing players which are large and established, which have a recognisable brand and very widespread presence across the European market,” he noted.

“Asia on the other hand, is a completely different market. It’s much fragmented. The penetration of ILS is much lower. There are some countries that have hardly been explored within the ILS space. So the hope for the market is really to be the first, be the closest to the client, and to be the one that will offer limited negative surprises to any investors. It’s a market where the investor base is a bit, as I said, less familiar with the asset class, so I think it’s important to provide them with understandable types of products offering an appealing complement to existing asset allocations,” Sangiorgio told Artemis.

Sangiorgio also explained why he believes Asia offers many opportunities for the ILS market, and shared further details as to how Twelve Securis hopes to expand its presence across the region going forward.

“I took up this role of strategic development for Asia a few months ago because we really wanted to have a focus on strategic projects and strategic initiatives in the region. I think that the region truly offers many opportunities for ILS. For example, we are working a lot in South Korea, and I think there is a strong interest from investors in the region for mixed ILS funds, combining cat bonds, and private ILS.”

Twelve Securis is also working closely with reinsurer Korean Re, to develop a shared innovative ILS product together.

“Korean Re will support us with the origination of certain risks. I think it’s something that brings together two fantastic brands. As I mentioned, this is very important because Asian investors value partnering with trusted brands, and a company with strong expertise in their respective fields,” Sangiorgio said.

With 2026 delivering a remarkable year for the cat bond market, highlighted by a record-breaking second quarter, that marked the largest ever seen for cat bond issuance, Sangiorgio shared what his expectations are for the market for the rest of the year and into 2027, particularly if pricing keeps softening and cat bond spreads keep declining.

“I’m not worried. I’m an optimist as a person, and I think that looking at things in perspective is important. We (Twelve Securis) are a specialist manager. We work with cat bonds and ILS all week long, but we should not forget that there is a world outside ILS. And outside of ILS, spreads for traditional fixed income markets are extremely tight while valuations on the equity side look fairly full,” he explained.

Sangiorgio continued: “There is also a heavy amount of geopolitical uncertainty. While the market looked more attractive in 2023 and 2024, when spreads were almost in the double digits, if not above double digits, on a relative basis, I think the attractiveness of the asset class is still there, and it’s undeniable, because everything has tightened, everything has corrected over the past few years, and from a relative perspective, cat bonds still offer very attractive returns.”

To conclude, given that a heavy influx of new first-time sponsors continue to venture into the catastrophe bond market, we asked Sangiorgio to share what he believes is helping to drive this momentum.

“You’d likely get a different answer depending on who you ask, but I think a lot of it comes down to transaction certainty. I come from a fixed income background, and the worst thing that can happen from an issuer perspective is that an issuer doesn’t find buyers for their deals after embarking in a long and costly issuing process. An issuer really spends a lot of time and effort trying to make this happen, and the fact the market grew, with more buyers having different type of appetite helps increase transaction certainty.

“If you look at the Cat Bond market today, it’s actually different compared to a few years ago. It’s larger. There are more players. There’s a lot more depth and understanding. So it reduces materiality execution risk, and this helps sponsors which are maybe smaller, newer, younger, with different geographies to basically try and gain access to this market,” Sangiorgio concludes.

Read all of our interviews with ILS market and reinsurance sector professionals here.