As innovation and global participation within insurance-linked securities (ILS) accelerates, the market is expected to continue evolving into an increasingly central part of the globe’s risk-transfer infrastructure, according to executives at Howden Capital Markets & Advisory (HCMA).
To begin, Kusche outlined what HCMA’s priorities and areas of focus are for 2026.
“Our focus for 2026 is to continue building a fully integrated advisory and capital markets platform that supports clients across their entire lifecycle, from early growth and capacity strategy to capital raising, structural innovation and ultimately strategic transactions,” Kusche said.
“Our ILS franchise has grown substantially since 2021, with issuance increasing more than sevenfold, and today we support around 14% of the outstanding market. That momentum reflects the strength of our integrated model.”
Kusche also emphasised how the increasing importance of capital diversification is helping to reshape the insurance and reinsurance landscape.
The executive specifically outlined that platforms that can access, and combine, traditional reinsurance, ILS, collateralized structures, reciprocals and hybrid models will be best positioned for long-term resilience and growth.
“As innovation accelerates and global participation widens, we believe ILS will continue to evolve into an increasingly central part of the world’s risk-transfer infrastructure,” Kusche added.
“HCMA continues to deliver exceptional precision in both pipeline visibility and capital outlook as demonstrated in its outlook last year. This strength stems directly from the foundations that have made HCMA a leader and fastest growing franchise in the Cat Bond market: a fully integrated investment banking platform and deep, multi-dimensional relationships with both investors and sponsors.”
Investor appetite for catastrophe bonds and ILS has been remarkably strong throughout 2025, and remains strong heading into 2026, which according to Rosenberg has been supported by structural improvements, and uncorrelated performance.
“As ILS becomes increasingly incorporated into multi-asset portfolios, the asset class is transitioning from niche allocation to strategic capital position,” Rosenberg told Artemis.
He continued: “A deepening secondary market, broader peril offerings and a growing pool of high-quality sponsors continue to attract institutional capital. Deepening secondary liquidity is essential to the next stage of the market’s evolution. As liquidity improves, investor participation increases, supporting continued expansion of the asset class.
“Overall, sentiment remains constructive, and we expect strong inflows across both public and private ILS strategies.”
To conclude, the executives outlined what opportunities and challenges the ILS sector may face throughout 2026.
“Key challenges remain such as climate volatility, model uncertainty, collateral efficiency and the need for greater liquidity, but each is also a catalyst for innovation. As the market continues to mature, we expect significant advancements in data quality, structuring and peril expansion,” Kusche said.
Concluding: “The combination of growing demand for resilience solutions and increasing sophistication among investors positions ILS for continued expansion, albeit with the need for disciplined underwriting, improved liquidity mechanisms and ongoing innovation.”
Also read: Cat bond market expansion and attractive private ILS opportunities lay ahead: HCMA
Read all of our interviews with ILS market and reinsurance sector professionals here.
