Insurance Linked Investments

Robust catastrophe bond issuance in the first and now second quarter of 2025 seems to have taken some of the excess cash out of the market, leading to a little more firmness in pricing of late, K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton has noted.

Signal Iduna Reinsurance Ltd. (SI Re), the Swiss based reinsurance company that invests in insurance-linked securities (ILS) for their diversification and return effects, has grown its ILS portfolio to EUR 84.5 million in 2024 and cited “pleasing returns” for the year.

A recent report from UBS Group’s global wealth management arm has highlighted catastrophe bonds as a growing sustainable investment opportunity, emphasising their role in climate adaptation and financial protection against extreme weather events.

AXA Group reported that gross written premiums grew by 12% for its AXA XL Reinsurance division during the first-quarter of the year, but the firm’s CFO Alban de Mailly Nesle explained that the majority of that was ceded to insurance-linked securities (ILS) strategies.

The insurance-linked securities (ILS) market is gaining ground as a viable reinsurance alternative, helped by reduced risk premiums, increased confidence in models, lower transaction costs and still-growing investor interest, leading Gallagher Securities to say it anticipates continued growth of the sector.

Obra Capital, an alternative asset manager that invests across a range of insurance-linked opportunities in life, annuity, property and casualty risks, has announced the promotion of Peter Polanskyj to Chief Investment Officer.

As climate risk escalates, insurers and reinsurers are increasingly relying on catastrophe modelling to navigate uncertainty. For insurance-linked securities (ILS) managers, these tools go beyond guidance, they are foundational to underwriting discipline, portfolio construction, and investor capital protection, according to a new report from LGT ILS Partners.

Everest Group reported a 95% jump in ceded property catastrophe written premiums to cells of its Mt. Logan Re Ltd. third-party capitalised sidecar-like structure in the first-quarter of 2025, as more excess-of-loss business was shared with the investors backing the Mt. Logan Capital Management strategies.

White Mountains reported that in the first-quarter of 2025 its investment into the Outrigger Re collateralized reinsurance sidecar, that supports its property and casualty insurance and reinsurance subsidiary Ark, was impacted by the California wildfires which contributed to a loss for the sidecar and an elevated 166% combined ratio for the period.

Having competed with demand for a couple of months, seasonality seemingly took over in the catastrophe bond market in April 2025, as spread widening returned and lifted the overall yield of the catastrophe bond market to 10.86% by May 2nd, according to the latest data from Plenum Investments.