The Florida Retirement System Pension Plan, which is administered by the Florida State Board of Administration, has new insurance-linked securities (ILS) fund allocations in its pipeline, with specialty and quota share strategies now being assessed for their suitability to add to the portfolio.When we , while both specialty reinsurance and quota share reinsurance were cited as potential diversification opportunities, at that time just one strategy was in the pipeline and the line of business being considered was not named.Now, after a September meeting, the latest disclosures show that the number of reinsurance or ILS funds in the pipeline for the Florida Retirement System Pension Plan has risen to two.While the disclosure explicitly states that these are a specialty lines strategy and a quota share strategy.

It’s worth noting that we cannot be certain at this time whether these are ILS funds, or perhaps other investment access points to the reinsurance market.Access to the returns of the Lloyd’s market has been cited as a potential way to generate more diversification within the ILS allocation of the Florida State Board, on behalf of the state pension plan, in the past, so it is possible the specialty lines focused opportunity in the pipeline could be a way to fund reinsurance business in that market.On the quota share side, this could be an ILS fund (Tangency Capital springs to mind as one ILS manager offering a specific quota share reinsurance focused fund strategy), but it could just as easily be a sidecar structure or direct partnership with a major reinsurer.

The Florida Retirement System Pension Plan continues to have a 1% of portfolio weight target for its ILS and reinsurance linked investment allocation.At this time the allocation makes up 0.9% of the total funds assets, and 13% of the so-called strategic investments bucket.With the assets of the Florida state pension fund having reached over $211.5 billion as of June 30th, that 0.9% could be close to the $1.9 billion mark that is invested into ILS and reinsurance-linked strategies.

Across the pension fund’s entire strategic investments bucket there are eleven new strategies in the pipeline, totalling a potential $1.325 billion of new investment commitments.At the recent Investment Advisory Council meeting, it was disclosed that there are two funds in the insurance-linked investments pipeline, one being focused on specialty lines, the other on quota shares.The insurance-linked investments allocation has far outperformed its benchmark in the last quarter, but is still running behind it on a one, three and five-year basis.

But with performance likely to have also been strong since the mid-year, the insurance investments have likely caught up further by this time for the Florida state pension fund.Catastrophe bonds have outperformed through the first-half of 2025, the Council heard, but the hard market remains in place across reinsurance, even though increases have declined and now softening begun.Diversification remains the focus at this time, as the Florida State Board investment team look to generate returns from the broader reinsurance sector, further away from peak catastrophe risk exposure.

The FRS allocation is benchmarked against the cat bond market and has underperformed thanks to the wildfires in California earlier this year, but with most of the pension’s investments sitting in lower reinsurance layers than where cat bonds operate the feeling is performance could be better, hence the desire to diversify to protect returns from across the insurance allocation during peak catastrophe periods.With two ILS funds or strategies now in the pipeline, it seems likely the Florida state pension fund’s allocations to the reinsurance sector will increase by year-end, likely in time for 2026.With the pension continuing to expand its assets, there remains room to grow and still maintain its 1% of portfolio allocation target for the ILS and reinsurance-linked investments.

Recall that, at this time the majority of the ILS allocations made on behalf of the giant Florida state pension plan are to natural catastrophe risks, via leading ILS managers Aeolus Capital Management, Nephila Capital, Pillar Capital Management and RenaissanceRe Capital Partners, with a smaller amount invested in life settlements with Miravast..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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