ILS market insights: July 2026

The first half of 2026 has continued to reaffirm the Insurance-Linked Securities (ILS) market’s role as a deep and resilient source of catastrophe risk capital. Following a record year of issuance in 2025, the market entered 2026 with strong momentum, supported by robust investor demand and a steady pipeline of new and returning sponsors seeking protection. Catastrophe bond issuance exceeded USD 17 billion across 64 transactions during the first half of the year, making H1 2026 the strongest first half on record and surpassing the previous high set in 2025.

Primary market activity remained broad, with repeat sponsors continuing to access the market for peak US wind, earthquake and multiperil protection, while first-time sponsors benefited from the market’s continued ability to absorb both peak and diversifying risks. This momentum persisted even as risk spreads returned to pre-Hurricane Ian lows, with all-in yields remaining attractive relative to expected loss and returns available from traditional fixed income alternatives.

The market has also benefited from a relatively benign catastrophe environment. Global insured natural catastrophe losses during the first half of 2026 are expected to be below recent historical averages, and no major natural catastrophe event caused meaningful disruption to the catastrophe bond market. Against a backdrop of heightened macroeconomic uncertainty and ongoing geopolitical conflicts, catastrophe bonds continued to demonstrate low correlation with broader financial markets, reinforcing the asset class’s appeal to investors seeking attractive risk-adjusted returns and portfolio diversification.

This edition of Insurance‑Linked Securities Market Insights reviews primary and secondary market developments in the first half of 2026, provides an updated view on Swiss Re’s catastrophe bond indices, and examines key themes shaping the market.