CalPERS wants to increase ILS investments to contribute to climate solutions goal: Bloomberg

The California Public Employees’ Retirement System, or CalPERS as it is better known, is exploring ways to increase its exposure to insurance-linked securities, which are seen as one asset class that can contribute towards its goal to invest $100 billion in climate solutions by 2030, according to a Bloomberg report.

CalPERS is one of the largest institutional investors in the world, with total assets under management of around $637 billion reported at the mid-year and the pension fund began allocating to catastrophe bonds and insurance-linked securities (ILS) in 2025.

The pension established three access points to the asset class, via three specialist ILS investment managers, with collateralized reinsurance through Integral ILS, catastrophe bonds through Swiss Re Insurance-Linked Strategies and quota share reinsurance through Tangency Capital.

We reported last month that the combined valuation of CalPERS allocations to the ILS asset class across these three managers ILS funds had approached $2.5 billion at the mid-point of 2026, which was up by around 70% just in the first-half of this year.

Bloomberg published an article yesterday that features an interview with Peter Cashion, Managing Investment Director – Sustainable Investments at CalPERS.

Cashion oversees the sustainable investment strategy of CalPERS, which is an area the pension fund wants to deploy more of its capital to, having set itself a target for what it terms climate solutions of having at least $100 billion deployed by 2030.

Interestingly, this is where insurance-linked securities came up in Cashion’s discussion with Bloomberg, getting a brief mention in the article.

“The whole reason we have this $100 billion target is that we think we can generate outperformance,” Cashion told the publisher. “With a big thematic mega-trend like this, there’s going to be opportunity in multiple areas.”

The article then states that CalPERS is looking for ways to increase its exposure to the ILS asset class, which Cashion said is an area that has the “size and scale” to make a dent in the $100 billion climate solutions investment target.

Within the climate solutions mandate, CalPERS targets investments in adaptation, including to disaster risk reduction, including community preparedness, into which ILS might fall for the pension.

Which would be a similar way to categorise the ILS asset class as has been seen with the UN’s Sustainable Development Goals.

It’s not immediately clear how CalPERS positions its ILS investments internally, but Cashion’s comments suggest it sees the asset class as delivering on climate and disaster risk capital to help communities in their recovery and in becoming better protected against risks.

More notably though, Cashion’s comments suggest that CalPERS still has meaningful room to grow into the asset class and when you consider the fact that even at around $2.5 billion of cat bond and ILS investments as of June 30th 2026, that was only around 0.38% of the pension funds total asset base, suggesting plenty of room to grow.

It will be interesting to see how CalPERS navigates the ILS market to find new avenues to deploy its capital, especially given the well-capitalised nature of reinsurance at this time.

Partnerships would seem a likely avenue, perhaps through the establishment of more direct relationships with large re/insurers offering ILS investment access points into their portfolios of risks. That’s one way larger pension investors can achieve scale in the asset class more easily, without purely introducing more capital to the sector that has to compete in the cat bond market or nearer the end of the chain of the reinsurance renewal cycle.

The California Public Employees’ Retirement System (CalPERS) is just one of the numerous pension fund and major ILS investors we track in our directories here.