Discipline matters more than growth, right-sizing ILS capital is key: Parry, RenaissanceRe

In this insurance-linked securities market environment where engagement from investors remains strong, Chris Parry, the Global Head of RenaissanceRe Capital Partners told us that a disciplined approach matters more than growth and right-sizing capital is key at this stage of the reinsurance cycle.

Speaking with Artemis around the time of the 2026 Monte Carlo Rendez-vous event, Parry explained that returns in the catastrophe bond and ILS asset class remain attractive, despite the much-discussed reinsurance rate softening.

Parry said, “Reinsurance rates and cat bond spreads have compressed over the last few years, but we still view the asset class as attractive relative to history and of course relative to other asset classes. For cat bonds specifically, the spread pickup versus credit alternatives remains compelling despite the continued tightening.

“RenaissanceRe maintains conviction in the opportunity and has recently increased its level of investment across several of our funds. When we commit our own capital alongside investors, it serves as a concrete signal of our confidence in valuations and provides them with tangible justification to deploy capital.”

He went on to discuss investor sentiment for ILS at this time, saying, “We continue to see strong engagement from existing investors, and there are new entrants taking a closer look at the space. Investors value the diversification benefits and return profile that ILS can provide and we are in regular dialogue with them about how they can access the asset class in different ways.”

But he noted that investors are increasingly focusing on how the ILS market is operating, at this stage of the reinsurance cycle.

“At this stage of the cycle, investors are paying very close attention to manager behaviour. Discipline matters more than growth.

“In our view, protecting underwriting margins and delivering strong returns for our investors over the long-term is far more important than growing assets under management,” Parry explained.

Parry feels that ensuring capital is right-sized to the opportunity is critical in disciplined ILS management and this is a key feature of ILS manager discipline at this time.

He told us that, “While raising capital is clearly important for a successful third-party business, returning capital is equally important to manage the reinsurance cycle effectively.

“Returning capital proactively is not standard practice in the ILS market and this is one of the ways RenaissanceRe differentiates itself. So far this year, we have proactively returned approximately $1 billion to investors across DaVinci, Vermeer, Top Layer and Fontana, through share repurchases and dividends.

“This approach reflects our discipline in right-sizing capital deployment through market cycles and has generated significant goodwill with our investor base. They trust our judgement, both in recognising when to hold and when to deploy. That trust is critical, and is one of the reasons we are able to successfully raise capital for new opportunities as they arise.”

As market opportunities evolve through the cycle it is important that managers stay disciplined both on underwriting the opportunity as well as in raising capital to meet it.

Parry closed our interview by adding that, at RenaissanceRe Capital Partners, “Our focus has always been on sourcing quality risk and then identifying the most appropriate capital to support it. This approach has served us well and we have many investors that have been with us for years and are invested in multiple vehicles.

“In fact, DaVinci is celebrating its 25th anniversary in October, a testament to the stability of our platform and our long-term partnership approach.”

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