ILS success hinges on discipline, avoiding past renewal mistakes: Albertini, Leadenhall

Following a sharp surge in momentum across the insurance-linked securities (ILS) space in recent years, further success in the market hinges on maintaining underwriting discipline and a clear avoidance of past renewal mistakes, Luca Albertini, CEO of Leadenhall Capital Partners LLP, told Artemis in an interview.

Speaking to Artemis around the 2026 Monte Carlo Rendez-Vous de Septembre (RVS) reinsurance industry event, Albertini highlighted that the ILS market is fundamentally in a healthy place.

As year-end renewal negotiations begin taking shape, Albertini explained to Artemis what he believes are the important topics and talking points that ILS markets and alternative capital managers should be taking into their meetings with investors and cedents around the key period.

“Assuming as we currently expect this year ends up generating positive risk adjusted returns, and assuming that the natural growth in capacity matches or outpaces the demand for new cover, the most important messages are to acknowledge this reality whilst at the same time making clear that maintaining underwriting discipline in defining acceptable risk adjusted returns and terms and condition, will be essential for the long-term benefit of all parties,” the executive explained.

He continued: “There is over $120bn of third-party capital in ILS with a relatively short commitment period and if the industry goes back to past mistakes and loses the trust of its investors and investment advisors, the potential for capital reallocation outside of our space for the medium term can have a material adverse impact on capacity, pricing, terms and conditions for reinsurance buyers for years to come. It is our impression all parties are aware of this and so do not expect that behaviour to re-emerge, but it is important we remind all parties of this at every opportunity.”

Sticking to the renewals, we asked the Leadenhall Capital Partners CEO whether he anticipates discipline to remain on key contract features such as attachment points? As well as how competitive he believes it will be at 1/1 if the catastrophe load remains lighter in the second-half of 2026?

“I expect discipline to be broadly maintained as our investor base demands that and would be quick in identifying bad behaviour from its managers. I see from current discussions that brokers and protection buyers understand this,” Albertini told Artemis.

He continued: “Reinsured may buy a more varied range of protection structures to take advantage of the additional capital, but ILS investors can identify the layers for which they have appetite and so if attachment points reduce, it may be to meet the appetite of a new investor type with higher risk tolerance or of pockets of traditional market appetite.

“The ILS fund does not have to reinvest in the exact same layer of a program each year and if the risk profile of a layer deteriorates to be out of tolerance the investor can select higher layers in the program

In regards to the overall health of the ILS market, Albertini stated that he believes that the market is in a healthy position, specifically highlighting how all property cat funds are expected to deliver healthy risk adjusted returns.

The CEO also acknowledges that terms and conditions have held firm, leading him to note that the market is “a lot more aware and sensitive” towards both the exposure and pricing of rising secondary perils such as wildfire and flood in the portfolios.

He also highlighted how low attaching aggregate features are largely not returning to the mainstream market.

We moved on to discuss investor sentiment and appetites for ILS and reinsurance investments, leading Albertini to say that he feels investor sentiment is currently positive for property cat focused funds as the growth of alternative capital dedicated to the ILS space clearly showcases this.

“The expected returns of ILS funds remain healthily positive for the full year, adding another positive year to the track record of the funds and of the industry,” the CEO explained.

Turning attention to the catastrophe bond market, annual 144A issuance has continued to heavily increase.

After a record-breaking 2025, where annual 144A issuance soared to an impressive $25.6 billion, the first half of 2026 maintained this momentum, setting a new first-half issuance record of nearly $18 billion and lifting the total outstanding market size to an all-time high of approximately $65.6 billion at the end of June.

Whilst cat bond issuance continues to increase, spreads have been compressed through reinsurance rate softening and high levels of capital and investor appetite. Given this, the Leadenhall Capital Partners CEO shared how sustainable he believes this is.

“The current level of investor appetite shows that the risk adjusted returns are still compelling in their own merit as well as relative to other alternative investments propositions,” Albertini added.

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