Insurance
Home›Insurance›Reinsurance›Catastrophe bond market keeps growing as ILS expands
Catastrophe bond market keeps growing as ILS expands
Moody’s said ILS capital in the global reinsurance market reached USD 144.5 billion in half year 2026, alongside record catastrophe bond issuance and continued new sponsor participation.
Strong investor demand and record catastrophe bond issuance are supporting continued growth in the insurance-linked securities market, even as the reinsurance market faces softer and more competitive conditions, according to Moody’s Ratings as covered by Artemis.
Moody’s cited Aon’s estimate of USD 144.5 billion in ILS capital within the global reinsurance market at half-year 2026, saying the period reaffirmed ILS as a deep and resilient source of insurance risk capital. The report also pointed to broadening participation, including a record number of first-time cat bond sponsors during the first half of 2026, plus insurers increasing protection when renewing maturing bonds.
Moody’s added that some cedants are using ILS more strategically, including to lock in current softer pricing and hedge against future price increases. It also referenced Aon’s estimate that reinsurance sidecars grew to roughly USD 23 billion of outstanding investments, about 50% higher than at the end of 2024.
On economics, Moody’s said ample capacity and relatively few large industry losses have weighed on traditional reinsurance pricing and catastrophe bond spreads. It cited the Guy Carpenter US Property Catastrophe Rate-on-Line Index declining by about 16% over the 2026 renewals, leaving pricing around 22% below the hard market peak in 2024, while cat bond spreads have also moved lower.