The growth story behind insurance-linked securities
Their appeal lies in their independence from economic cycles and their potential to provide steady returns even when traditional markets are under stress
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AFTER years of low yields and rising macro volatility, investors are demonstrating renewed interest in insurance-linked securities (ILS) for their very low correlation with traditional financial markets. Despite event-driven volatility, the first half of 2025 reaffirmed the market’s strength and growing scale.
According to mid-year industry data, ILS issuance reached US$17.2 billion across nearly 60 transactions, making 2025 the second-largest year in the market’s history, with half the year still to go.
The total market size surpassed US$56 billion, having expanded by more than 75 per cent since 2020. Last year alone saw 10 new issuers and three wildfire bonds, signalling growing investor confidence alongside supportive market dynamics.
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