spreads

According to a new report from specialist insurance-linked securities (ILS) manager Twelve Securis, as the investment environment within ILS continues to evolve and spreads normalise from recent highs, the margin for error is narrowing, making execution quality more important than ever.

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.

Despite tighter spreads in the catastrophe bond market, Legal & General (L&G) intends to maintain its exposure to the asset class, with Alex Turner, Fund Manager Assistant, and Martin Dietz, Head of Diversified Strategies, noting the firm is prioritising portfolio integrity while awaiting more favourable entry points, rather than rotating out of the space.

With global warming said likely to drive a rise in the frequency and severity of natural disasters and certain extreme weather events, the re/insurance industry faces a shifting landscape. However, a recent analysis by Solidum Partners AG suggests that the insurance-linked securities (ILS) market is uniquely positioned as a key capital source to support re/insurers.

2025 saw a long-standing pattern reverse within the catastrophe bond market, as diversifying risks began offering spreads comparable or higher than those of traditional peak perils, while valuations between index-linked and indemnity structures normalised, Florian Steiger, CEO of Icosa Investments AG highlighted in a recent report.

As the insurance-linked securities (ILS) sector expands, investors are being drawn to the market by its strong performance over the past several years, its diversification benefits, and the attractive relative value currently offered by catastrophe bond spreads compared with those of other asset classes, according to Schroders Capital’s Stephan Ruoff.

Welcome to Artemis’ 2025 Monte Carlo Rendezvous Executive Roundtable, during which nine leaders and experts from across the insurance-linked securities (ILS) and reinsurance sector discussed the current state and future prospects of the market.

Welcome to Artemis’ 2024 Monte Carlo Rendezvous Executive Roundtable, in which nine expert speakers from across the insurance-linked securities (ILS) space discussed the sustainability of current market conditions and returns, investor sentiment, potential growth areas, and more.

The average multiple (price coupon, or spread, divided by expected loss) of catastrophe bond notes issued has been on the rise for around two years, and in the third quarter of 2023 reached a new quarter high of 6.87, according to Artemis’ data.

The recent stabilisation of pricing in the catastrophe bond issuance market is a positive signal for the broader catastrophe reinsurance market, suggesting that technical levels have been reached and capital providers will go no lower, according to analysts at Morgan Stanley.