Catastrophe bonds and insurance-linked securities (ILS) have become a foundational component of cedant and sponsor reinsurance towers in 2025, with the market now living up to the promise many believed it presented from the start, speakers in our said yesterday.Yesterday, we held our The video replay is now available to those who registered and if you didn’t sign up before, you can still register to get access to the on-demand replay .While our expert speakers explored the fact the ILS market has become a foundational component for many reinsurance and retrocession buyers, occupying an increasingly large share of some towers, they also highlighted an expectation that growth of the asset class continues, which we wanted to highlight in this short review.The webinar featured participants: During the webinar, Aon’s Schultz, reflected on the continued expansion of risk globally, and the corresponding opportunity for the ILS market.

“We are seeing people want to live in harm’s way, and so I think we will continue to see growth in the property markets.Personal lines, I think we’ll continue to see just growth overall, as just the levels of risk continue to increase globally.“So, it is actually a very interesting time to be in this market.

I do feel like we’ll continue to see profitable growth and reasonable cost of risk transfer options for clients, I think the two can go hand in hand.” Moreover, Computershare’s Alfano, highlighted the globalised nature of ILS and underscored the importance of market liquidity and competitive pricing in driving further expansion.“Given what we’ve seen so far this year, I definitely think we’ll continue to see an increase in the requests for trust and support of both the collateralized and the cat bond space, and we would love to see the continued growth with our Canadian team and then the Canadian market.Just one example of the reinsurance base and the ILS base broadening outside the U.S.

“As long as we continue to see liquidity in the market, support for growing issuance through competitive pricing and investor appetite, we’re going to continue to see both the cat bond and broader ILS market continue to expand.” Meanwhile, Velotti, from Pillar Capital Management, pointed to encouraging signs of sustained discipline in pricing and contract terms, a marked contrast from earlier cycles.“I think, terms and conditions and discipline in the property insurance space has held up reasonably well.There’s been a little bit of price reduction, but I think it was mentioned earlier about some of the retentions, and a lot of the insurers want to buy down their retentions because of the secondary perils.” Adding: “The retentions in reinsurance has really held steady along with most of the terms and conditions, so that’s a positive, where, again, you hover back to the 2013-2017, time period, and terms and conditions were deflating as quickly as price was, so it was a bit of a double whammy.” Looking ahead, Velotti said growth in reinsurance limits must keep pace with inflation, and that the real opportunity lies in expanding coverage to the uninsured.

“In construction, inflation has probably been running about 7%, so you would think that reinsurance limits purchased would at a minimum grow at 7% and so from that standpoint, if you can actually penetrate some of the uninsured, then the growth might be more like 10% or 11%, which is where it falls to the major brokers to have those discussions.He continued: “So from that standpoint, closing the coverage gap and bringing more people into the fray is going to do nothing but make the industry stronger.So that’s something that really falls to the major brokers, because they’re talking to clients all the time.” From the issuer side, Citizens’ Montero highlighted the sustained value of catastrophe bonds as part of their overall risk transfer strategy, despite a shrinking book of business.

Discussing Citizen’s recent $1.525 billion Everglades Re II Ltd.(Series 2025-1) issuance, Montero said: “So this transaction is our 13th issuance of cat bond since we entered the market in 2012.So, over the last 14 years, the ILS market has been an important risk transfer tool for Citizens.

It provides diversification, favourable terms, additional capacity pricing tension for overall program.But each year we do go out and evaluate market conditions in both markets, and allocate our coverage based on what makes the most sense for the overall program, based on the terms and conditions pricing and capacity of each market.” She added that while the private market in Florida is showing signs of recovery, Citizens will remain active in the ILS space.“As Paul said, it’s very dynamic, and each year it could be very different, even though our book of business is shrinking due to strengthening of the private market in Florida, the risk transfer will continue to be an important tool for us to reduce the probability and the amount of potential assessments in Florida.” ..

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