Greater market liquidity, a key challenge and opportunity for ILS in 2026: Swiss Re execs

As the insurance-linked securities (ILS) sector moves into 2026, one key challenge and opportunity that the market faces lies in the push for greater market liquidity, with senior executives from reinsurer Swiss Re noting that the space is still far from achieving robust daily pricing and dedicated liquidity providers.

We recently spoke to Mariagiovanna Guatteri, CEO & CIO of Swiss Re Insurance-Linked Investment Advisors Corporation, and Christopher Minter, Head of the reinsurer’s Alternative Capital Partners (ACP) division, who both shared their views on the market and provided an outlook for 2026.

Recall, in September that Swiss Re merged its two ILS management units under the Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC) brand, with Guatteri taking on responsibility for the combined ILS investment manager operations of the reinsurer.

2025 has been a remarkable year for the ILS market, particularly for the catastrophe bond market. The market has experienced unprecedented growth in issuance and total outstanding capital, driven by strong investor demand and increased sponsor participation.

However, as the industry begins to head into 2026, we asked the executives to name what challenges and opportunities they believe the sector may face over the coming year.

“One key challenge—and opportunity—lies in the push for greater market liquidity. While the number of participants is growing and more managers are active in the secondary market, we are still far from achieving robust daily pricing and dedicated liquidity providers,” Guatteri told Artemis.

She continued: “With strong investor demand and support, there is a clear opportunity for the ILS market to broaden its footprint. However, this expansion must not come at the expense of transparency and structural integrity.”

Turning attention towards the catastrophe bond market, Guatteri stated that the market is likely to maintain its strong growth trajectory in 2026, driven by continued momentum on both the supply and demand sides.

“I expect to see new sponsors and perils entering the space as catastrophe bonds further cement their strategic role in global risk transfer. Assuming no major natural catastrophes or other disruptive events, spreads should remain broadly stable within the typical range of a regular cat bond market cycle,” she explained.

Adding: “Institutional investor interest in this asset class remains robust, though some may choose to reduce allocations after recent gains, depending on relative value considerations versus alternative investments and/or target allocation to ILS.”

The executive also stressed that the catastrophe bond market “needs to enhance the granularity of exposure data available to investors.”

“Greater transparency would enable the transfer of a broader range of perils and structures, ultimately supporting market innovation and meeting growing investor demand,” Guatteri said.

Given that the catastrophe bond market is presently experiencing lower spreads in comparison to the peaks observed in 2023, Guatteri addressed whether Swiss Re considers the current lower spread environment to be sustainable.

Additionally, we also asked the executive whether she anticipates a return to levels that lie between the current situation and the peak, as excess capital is absorbed in the forthcoming months?

“For end-investors, the key consideration is relative value versus other asset classes and the importance they place on diversification benefits. With tighter spreads, some investors may slow the pace of inflows, which could support spread stabilization or even widening, especially as supply remains elevated,” Guatteri noted.

“In this environment, profitability becomes much more sensitive to portfolio construction and selectivity. Absent major catastrophe or other disruptive events, some degree of reversal is possible if market discipline prevails through careful selection and measured AuM growth.”

To end, Minter shared provided an overview on Swiss Re plans to prioritise and focus on in 2026 for its ACP division.

“For Swiss Re’s ACP business, 2025 was a year of strategic development and expansion, particularly on the investment management side. We want 2026 to be a in which we consolidate that progress and build on the foundations we have laid down, maintaining our strong investment performance on the buy-side and our growth trajectory on the sell-side,” Minter explained.

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