As the insurance-linked securities (ILS) space moves through the second half of 2025, a lighter period of catastrophe losses would still likely see hard-market discipline on structures and terms continue into the January renewals, according to Jean-Louis Monnier, Head of ILS at Swiss Re Capital Markets.Monnier leads ILS at Swiss Re’s Capital Markets division, which designs and distributes risk transfer and financing solutions, including securitisations, catastrophe bonds and other forms of ILS.Speaking with Artemis around the key reinsurance conference season, Monnier discussed whether he excepts discipline to remain on contract features such as attachment points at the next renewals, and how competitive he foresees it being if the catastrophe load remains lighter in H2’25.“Even with a light H2 of loss activity for ILS markets, we expect most of the hard-market discipline in ILS to hold into 1.1.2026 both on attachment points and terms, though if the investor demand exceeds cat bond supply, cedents will benefit from a competitive pricing environment,” Monnier explained.

As the industry begins to head into the key January renewals season, Monnier stressed that confidence among ILS investors remains solid, while momentum within the catastrophe bond market is expected to hold.“Heading into renewals, investor sentiment across ILS is robust, and we expect that cat bonds will keep attracting inflows, casualty ILS is gaining traction for diversification in sidecar format, and cyber remains a novel and nascent risk, but ultimately one which SRCM expects will continue to grow,” Monnier said.We also asked Monnier to outline what he believes is the biggest challenge facing the ILS space today.

“More investors are willing to allocate to ILS, though deploying that capital efficiently, without eroding underwriting discipline, has become key for investors managing inflows during periods of lower primary market offerings,” he explained.To conclude, Monnier assessed the overall health of the ILS market.“Cat bonds and broader ILS supply are at record highs.

Collateral yields remain attractive, and the investor base is continuing to broaden its institutional reach,” he told Artemis.more than $1 billion of catastrophe bond and related ILS issuance was recorded in the period, which drove annual cat bond issuance to a record $18.6 billion.Monnier also outlined that trapped capital following events remains a key focus going forward.

“Following Hurricane Ian, structural efficiencies within ILS instruments have set precedent which has helped to improve the level of trapped collateral and given investors the ability to redeploy unlocked capital at key renewal dates,” he added.Concluding: “Importantly, we see the ability of the investor community to absorb the significant increase in new issue supply over the last several years without disturbing new issue or secondary pricing as clear evidence of a well-functioning and healthy market.” ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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