With the catastrophe bond and insurance-linked securities (ILS) market expected to continue growing by analysts at investment bank Jefferies, they say that this will necessitate a continued expansion further into new and secondary perils, to offer broader risk management for re/insurers and an increasingly diversified investment choice for allocators.
In a recent report, the Jefferies equity analyst team focused on the insurance and reinsurance industry, explained their belief that the cat bond and ILS market has a “meaningful growth opportunity” ahead of it, with a near doubling of sector capital to as much as $200 billion possible by the year 2032.
They also highlighted that the rebound in issuance and expansion of the catastrophe bond market of the last few years is expected to broaden out to other ILS vehicles in 2025, such as collateralized reinsurance and sidecar opportunities.
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