Industry loss warranty news

Franklin Templeton Investment Solutions, the hedge fund-focused arm of the global asset manager, has maintained its overweight conviction on the catastrophe bond asset class, with the firm citing that while yields and spreads have compressed compared to last year, the market remains healthy, with no evidence of weakening fundamentals.

The insurance-linked securities (ILS) market has entered 2026 with significant momentum, driven by an unprecedented surge in catastrophe bond issuance and strong global demand for protection. SCOR Investment Partners believes this robust primary activity will play a critical role in sustaining current spread levels across the market throughout the year.

Franklin Templeton Investment Solutions, the hedge fund-focused arm of the global asset manager, has moderated its stance on catastrophe bonds from ‘strongly overweight’ to ‘overweight’. Despite this shift, the manager maintains that the asset class remains attractive.

Specialised reinsurance broker Willis Re has identified increased activity in private insurance-linked securities (ILS), catastrophe bonds, and industry loss warranties (ILWs) as notable trends within the ILS market during 2025.

The Ambassador catastrophe bond focused US mutual fund strategy operated by Embassy Asset Management has grown its total insurance-linked securities (ILS) assets under management to more than US $700 million or the first time, while the strategy delivered an 11.61% return for the last year of record.

The retrocession renewals for January 1st 2026 were finalised much later than usual. But, with ample capacity available from traditional and ILS markets, buyers achieved price reductions and also re-introduced more frequency protection to their coverage, according to Gallagher Re.

As per reinsurance broker Howden Re, industry loss warranties (ILWs) are expected to return to more normalised growth in 2026, as the January 1st reinsurance renewals showed rates falling by 10% to 20%.

As per broker Guy Carpenter’s 1/1 reinsurance renewals report, there was a notable rise in demand for property retrocession lines during the January renewals, with the company noting that ongoing growth in supply contributed to some price reductions and broader coverage.

Willis Re, the recently established reinsurance brokerage launched by WTW in a joint venture established with specialist private investment firm Bain Capital, is building out its broking expertise of relevance to the insurance-linked securities and third-party reinsurance capital markets.

At the 29th Federation of Afro-Asian Insurers & Reinsurers (FAIR) General Assembly, held in Mumbai, India, industry leaders explored the future of risk management amid global uncertainties, including the growing challenge of political risks and how insurers and reinsurers can strengthen their ability to manage them effectively.