At Artemis’ ILS NYC 2025 conference, which took place in February, a panel of leading industry voices examined how the insurance-linked securities (ILS) market is responding to a higher-risk world, while maintaining performance and attracting institutional capital.
He was joined by: Eveline Takken-Somers, Senior Director, Lead Portfolio Manager – Insurance Portfolio, PGGM; Mark Booth, Chief Risk Officer, Vantage Risk; George Evans, Managing Director, Relative Value Sector Head, Aksia LLC; and Aditya Dutt, President, Aeolus Capital Management.
During the panel, Volpi reflected on the scale of industry losses in 2024, which was estimated at around $140 billion, nearly double the historical average seen just seven or eight years ago.
“Despite those levels of industry losses, we’ve been able to deliver very strong performances, and now the talk is the new average is going to be $140-$150 billion per annum because of this frequency of secondary perils,” Volpi said.
While risk has increased, panelists agreed that pricing has evolved in tandem, with Booth noting that higher returns aren’t just the result of market repricing, and that they reflect a fundamentally riskier landscape.
“If we look at price increase as a single metric, in the market reset that was a big increase, but there’s an associated risk landscape that’s increased with that. If you look at the time span from 2016 through to 2020, as a five year average, and then a new five year average, in the last five years, our average annual industry loss has actually kept pace with that increase in price. So, it is a riskier world, as we all know, and no shortage of surprises we need to consider as we price the business,” he explained.
Of course, within this environment, catastrophe bonds have emerged as a particularly attractive option for investors, offering stable returns and operational efficiency. However, as Dutt pointed out, recent inflows have caused pricing to decouple from other reinsurance layers.
“We’re much larger in the non-cat bond space, although we have a presence in bonds. My observation of the bond market is that the spreads have been contracting over the past six months, and arguably they’ve contracted more than riskier parts of the loss tower,” said Dutt.
Investor sentiment was another key theme that was discussed during the panel as Evans shared how ILS markets have seen a powerful resurgence in institutional capital over the past two years.
Evans shared how the recent strong performance in capital markets has brought a new cohort of investors into the space.
These newer investors, Evans noted, are typically conservative in their return targets, but capital markets offerings in the ILS space, particularly cat bonds, have recently outperformed expectations. He also noted that the positive experience in cat bonds is encouraging some ILS investors to look at other products in the asset class.
“With cat bonds offering a 15 to 20 all-in return, no loss, that’s multiples of what a lot of our clients are targeting year over year,” he said. “They’ve had a very positive experience, and we’ve started those conversations around what’s next and what else exists in the market.
“And these are people that haven’t spent a long time in ILS, where education is really the key lever to kind of solidify that experience and have them provide an increasing amount of support capital-wise to the industry.”
Further in the discussion, Takken-Somers also highlighted the importance of structure and flexibility in investment portfolio design and noted that while cat bonds offer clean and low-cost exposure, there’s value in private ILS and collateralized reinsurance, assisted by underwriting and operational leverage.
“We aim for a product where we can be as efficient as possible, try to have a low cost, some operational leverage as part of that. Because I think that’s the element that cat bonds do not offer. I think from cat bonds, it’s full collateral, even if just going to collateralized reinsurance typically it is limit minus premium, you can add further leverage by doing quota shares. So I think that helps, in generating returns over the cycle,” she said.
Another major theme that the panel discussed was trapped collateral, which had been a persistent challenge in both cat bonds and collateralized reinsurance. But improvements are being made, with Dutt in particular, pointing towards contractual changes, rising yields, and new market solutions as signs of progress.
“We’ve improved how we handle trapped collateral. Unfortunately, the lower down the risk tower you go, the more this is a relevant, germane topic, but I think all of these changes have improved things,” Dutt said.
Dutt went on to suggest additional improvements should continuously be made to the ILS offering, but highlighted recent initiatives to free up trapped capital across the market and improvements to contract terms that benefit the product going forward, saying, “All of this is excellent. It may not be perfect, but I think all of it is excellent.”
Volpi also reminded the audience that this issue is not confined to one instrument: “The issue of trapped collateral applies to both catastrophe bonds and proper placements of reinsurance. If you invest in a catastrophe bond that has a tail of three years and there is an event just before the end of the maturity, then the bond gets extended, you know, for maybe three years, and it starts trading well below par, so again, that’s collateral trapping risk. It’s the equivalent of a proper placement of reinsurance.”
Despite the complexities inherent in products, the panel was optimistic about the evolution of the ILS asset class and agreed that improvements made are beneficial for the future.
From structural and operational efficiency, to more sophisticated risk pricing. The ILS market is showing its ability to adapt and deliver—even in a volatile world.
Watch the full video of this ILS focused panel discussion at ILS NYC 2025 (embedded below), for unique insights into developments in the private and collateralized side of reinsurance investments, how large institutional allocators are viewing the opportunity in this market segment, as well as the thoughts of ILS managers offering those private ILS fund opportunities and on their comparability to catastrophe bonds.
More videos will follow in the coming weeks from our ILS NYC 2025 conference.
Artemis’ next confirmed conference dates will be (please save them): Artemis London 2025 on September 2nd 2025, and Artemis ILS NYC 2026 on February 6th 2026!
All of our Artemis Live video interviews have a focus on reinsurance, ILS and the efficiency of risk transfer and can be accessed directly from our Artemis Live page.
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