While the insurance-linked securities (ILS) market has been growing at a strong pace, thanks in the main to record levels of catastrophe bond issuance, rating agency AM Best believes that while this contributed to reinsurance market softening, the deployment of traditional capacity is still more impactful.
While reinsurance market participants cite the growth of insurance-linked securities capital as one driver of property catastrophe rate softening, the traditional market’s capacity to deploy has grown more on a dollar basis.
Recall that, AM Best and reinsurance broker Guy Carpenter estimated that third-party capital in reinsurance grew to $123 billion by the end of 2025 and it is projected to reach around $130 billion by the end of 2026.
FULL ORIGINAL PUBLICATION HERE