ILS Market Monitor

Cat Bond Issuance & Pricing

Total cat bond issuance remains at $18.9bn+ YTD per Artemis' live deal directory, with wildfire-exposed issuance holding at $5.183bn — still closing in on 2025's full-year wildfire record of $5.55bn. No new 144A deals have settled since the batch of five that closed in mid-July (Matterhorn Re 2026-3, 3264 Re 2026-1, Harbor Crest Re 2026-1, Artex Axcell Re FE0004, Seaside Re 2026-61), consistent with the market's typical late-summer lull ahead of the autumn pipeline. On the private side, Artex Axcell Re continues to be active: its 2026 private cat bond programme has now issued more than $383m across four series, and Artex's Faries noted publicly this month that today's ILS market is "significantly broader, more resilient" than in past cycles, even as complexity continues to rise for structurers and investors alike.

Reinsurance & Retrocession Market

The softening cycle that began at 1/1 (Guy Carpenter's Global Property Cat Rate-on-Line Index down 12% at Jan 1, Gallagher Re down 15%, Howden Re down 14.7%) has held through the July mid-year renewals at -16% YTD for Guy Carpenter's index — still the steepest annual decline since the late 1990s. There is no new renewal data this week (the next major reset point is 1 January), but AM Best used the quiet window to publish a forward look: it expects competitive pressure on reinsurers to keep rising into 2027 as record dedicated capital (~$660bn) and growing alternative capacity persist, though it believes underwriting discipline can keep returns attractive even as rates keep falling. Consistent with that theme, Willis Re's acquisition of BMS Group's US reinsurance broking division — its first major deal since relaunching as a WTW/Bain Capital joint venture in 2024 — adds a capital-markets capability the broker previously lacked, a sign that broker consolidation is accelerating alongside the reinsurer-side capital growth. Separately, Munich Re and Lloyd's moved to the top of AM Best's latest global reinsurer capital rankings.

Loss Events

The Spokane, Washington wildfires remain the loss event to track most closely — the three fires (together called the Complex Fire) have burned over 10,000 acres, destroyed more than 700 homes and forced roughly 65,000 evacuations, with AM Best and Gallagher Re both flagging a potential billion-dollar, possibly record, insured wildfire loss for the state. Washington's Office of the Insurance Commissioner has not yet published claims totals but remains on track for its first data-call report by end of August. Elsewhere, CatIQ raised its industry loss estimate for the late-June/early-July severe thunderstorm event across southern Ontario and Quebec by 17.5% to C$439m in its 45-day update, with the increase concentrated in commercial-lines claims growth. In the US, Allstate reported July catastrophe losses of $682m, lifting its cumulative pre-tax cat losses for the year to $2.402bn across 23 events, about 75% of which were wind and hail. On the broader hurricane outlook, NOAA's forecast is unchanged (below-normal season, 75% probability; 7–13 named storms, 2–6 hurricanes) with three named storms so far (Arthur, Bertha, Cristobal) and no hurricanes yet — see the Hurricane Tracker tab. See the Events tab for the full multi-year loss history.

ILS Fund Flows & Performance

H1 2026 ILS Advisers Fund Index performance holds at +4.05%, still a strong showing for the strategy class, though below 2023–2025's hard-market peak returns; July's monthly reading has not yet been published. Swiss Re Capital Markets' most recent secondary-market update (covering H1) showed TRACE trading activity of 806 transactions through June, up roughly 37.5% year-on-year, with May 2026 the most active secondary month since March 2020 — a sign investor engagement with the asset class remains elevated even as new-issue supply has paused for the summer.

Regulatory & Structural

Beazley partnered with Integral ILS to launch a new cyber ILS fund platform in Bermuda, another sign of capital-markets appetite extending beyond traditional property catastrophe risk. Artex Capital Solutions announced a partnership with legacy and run-off reinsurance specialist Enstar to introduce structured exit options embedded within Artex's ILS vehicles, aimed at solving trapped-capital issues that have historically frustrated investors in collateralized structures. And in broker M&A, Willis Re's purchase of BMS Re US (covering BMS Intermediaries Inc., BMS Capital Advisory LLC and BMS Re's US-focused London team, terms undisclosed and pending regulatory approval) is the most concrete sign yet that reinsurance broking consolidation is continuing alongside growth in capital-markets-adjacent capabilities.

The season's third named storm, Cristobal, formed over the northern subtropical Atlantic in mid-August with peak sustained winds of around 45 mph, tracking away from land toward the Azores and western Europe without a US or Caribbean landfall. A fourth system — provisionally watched for the name Dolly — was tracked off the coast of Africa in mid-August but lost organization amid strong wind shear linked to the strengthening El Niño and had not formed as of this update. NOAA's August 6 forecast update remains the most current outlook: 7–13 named storms, 2–6 hurricanes, and up to 2 major hurricanes for the full season, with a 75% probability of a below-normal season driven by El Niño conditions suppressing tropical cyclone formation and intensification across the basin. Despite the quiet storm count and zero hurricanes to date, Swiss Re's Monica Ningen has cautioned that an "on-trend" year can still produce roughly $148bn in industry insured losses, with a modeled 10% chance of a $320bn peak-loss year — a reminder that named-storm counts are a weak predictor of tail-risk outcomes for a reinsurance or ILS book.

Market Commentary

Property catastrophe reinsurance pricing has now fallen for two consecutive renewal cycles after the 2023 hard-market peak, and 2026 remains the sharpest correction in decades: Guy Carpenter's Global Property Cat RoL Index is holding at -16% year-to-date through the July mid-year renewals — the steepest annual decline since the late 1990s — with no new renewal data this week since the next major reset point is 1 January. Gallagher Re and Howden Re's competing indices told the same story at January 1 (-15% and -14.7% respectively). The driver across all broker commentary remains consistent: record dedicated reinsurance capital (~$660bn) plus growing ILS/alternative capacity has pushed negotiating leverage decisively toward cedents on the back of a largely benign loss environment through most of the year prior to the Spokane wildfire.

AM Best used this quieter renewal window to publish a forward-looking view: it expects competitive pressure on reinsurers to keep building into 2027 as capital keeps growing faster than demand, but believes underwriting discipline — rather than a repeat of the pre-2023 soft-market excesses — can keep sector returns attractive even as headline rates continue to fall. That view is broadly consistent with Munich Re and Lloyd's moving to the top of AM Best's latest global reinsurer capital rankings this week, underscoring that scale and balance-sheet strength remain the differentiators cedents are rewarding in a softening market.

Cat bond spreads continue to reflect the same dynamic. Swiss Re's cat bond indices showed weighted average spreads tightening steadily through H1 2026, and secondary-market activity remained unusually strong — Swiss Re Capital Markets recorded 806 TRACE-reported trades through June, up roughly 37.5% year-on-year, with May 2026 the busiest secondary month since March 2020. Absolute pricing levels remain well above trough even so: Guy Carpenter notes its Global Property Cat RoL Index still sits roughly 32% above where it bottomed during the 2017 soft-market low. Whether the market continues to soften into 2027 will hinge largely on how the remainder of the 2026 Atlantic hurricane season plays out and whether the Spokane wildfire loss proves large enough to change reinsurer risk appetite at the margin.

Market Commentary

Private ILS — collateralized reinsurance, quota shares and sidecars — makes up the larger, less visible half of the alternative capital market. Aon puts total third-party/alternative reinsurance capital at $141bn as of Q1 2026 (Q2 figure not yet published), against an outstanding cat bond market of $65.6bn — meaning privately placed structures account for roughly $75bn, more than the public cat bond market itself. Unlike cat bonds, these deals are bilaterally negotiated between cedent and investor/fund, rarely disclosed publicly, and have no equivalent to Artemis' cat bond deal directory — which is why this tab is built from aggregate market-sizing and manager-level disclosures rather than a deal-by-deal table.

This week brought a notable structural development for the segment: Artex Capital Solutions partnered with legacy and run-off specialist Enstar to embed structured exit options within Artex's ILS vehicles, directly targeting the "trapped capital" problem that has historically discouraged some investors from collateralized reinsurance structures — capital held back after a loss year while claims develop can now, in principle, be more efficiently released or transferred. On the private cat bond side, Artex Axcell Re remains the most visible active issuer, having priced four series in 2026 totalling more than $383m, most recently a $60m Series FE0004 transaction. Separately, Arch Capital's Voussoir Re sidecar issued a new tranche (Series 2026-9, 10,760 preferred shares) this week, continuing the steady drip of sidecar capital renewals that don't always come with disclosed dollar sizes.

The broader structural story for 2026 continues to be the rise of casualty sidecars: still roughly 10% of total sidecar capacity but growing from a low base, with first-time casualty sidecar launches this year from QBE Re (George Street Re), Everest Group (Annapurna Re) and Hamilton Insurance Group. AM Best estimates the overall sidecar segment has grown roughly 183% since 2023. Looking ahead, most commentary (HSCM, Insurance Insider ILS, Aon Securities) continues to point to $10–20bn of further ILS market growth in 2026, with private credit increasingly cited as the next major capital source. For an advisory practice, the opacity of this segment remains the opportunity: manager selection, structure comparison and terms benchmarking — including newer features like Artex/Enstar-style exit mechanisms — are harder to do from public data alone, which is precisely where independent due diligence adds the most value relative to the cat bond market.