The insurance-linked securities (ILS) market experienced a strong month of returns in July 2025 according to the ILS Advisers Fund Index, with private ILS funds leading the way and on average now positive for the year to July 31st as a group, having erased the negative effects of California wildfires at the start of the year.July was the strongest month of returns for 2025 so far, as both pure catastrophe bond funds and the private ILS funds that allocate to collateralized reinsurance opportunities delivered impressive performance.
With no significant catastrophe losses affecting ILS fund strategies in July, the average performance across all of the 37 constituent funds that have reported returns for the month so far reached 1.51%, according to ILS Advisers.
That makes July the best month of the year so far for the sector, as catastrophe bond yields and reinsurance premium accrual drove performance for ILS funds.
Private ILS fund strategies led the way to deliver an impressive 1.86% average return for the month.
That now takes the group of private ILS funds positive for the first time this year, having now fully recovered from the negative impacts suffered after the Los Angeles, California wildfire event in January.
It’s important to note that not all private ILS funds experienced the same level of impact in January, so some will have turned positive sooner than July.
For the pure catastrophe bond funds, July 2025 saw an average gain of 1.19%.
As we’d previously reported, the catastrophe bond market delivered a total return of 1.47% in July 2025, as seasonality kicked in and drove what we were told was one of the best performances for that month of any year in the history.
All 35 of the ILS funds tracked by ILS Advisers that have reported returns for July 2025 so far were positive for the month.
Demonstrating the wide-range of investment strategies available in the insurance-linked securities market, across those 35 ILS funds performance ranged from +0.94% to +3.99% for July 2025.
Given August has also not seen any particularly significant catastrophe loss events for the ILS market, it can be expected that another strong month of returns is likely to be reported when this Index is next calculated.
You can track the ILS Advisers Fund Index here on Artemis. It comprises an equally weighted index of 37 constituent insurance-linked investment funds which tracks their performance and is the first benchmark that allows a comparison between different insurance-linked securities fund managers in the ILS, reinsurance-linked and catastrophe bond investment space.
