Full Capacity: ILS: Will 2026 separate the pros from the posers?

March 14 2026 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.   

IAN exclusive. Munich Re has hired Sompo veteran Koki Shiomi as a marine underwriter in Japan. Shiomi will start at the global reinsurer from April 1 and will report to Justin Xu, regional head of marine Asia Pacific. 

War backstop. US International Development Finance Corporation (DFC) has announced a US$20bn maritime reinsurance facility to provide cover to ships transiting the Strait of Hormuz, which will be led by Chubb. The reinsurance program on a rolling basis will focus on hull and machinery and cargo. 

Sale on the cards? Warburg Pincus is weighing a sale of its insurance platform, Oona Insurance, after receiving interest from other insurers and investment firms, Bloomberg reported. A transaction could value Oona at several hundred million dollars, the report said.  

Leadership change. MSIG Asia chief executive Clemens Philippi has been appointed chief strategy officer of MS&AD Insurance Group’s international business and an executive officer of the group effective April 1. Philippi will retain his responsibilities as chief executive officer of MSIG Asia. Meanwhile, Norihiro Tanaka will become chairman of MSIG Asia, succeeding Tetsuya Adachi, who “will conclude his tenure with the group”. 

Women in charge. Industry leaders say insurance has made real progress on gender equality but still lags other sectors, with a persistent glass ceiling at senior levels.  

Speaking to InsuranceAsia News for International Women’s Day, Asia Insurance’s Winnie Wong, Axa XL’s Sylvie Gleises, Coface’s Grishma Kewada, Zurich’s Tulsi Naidu, Howden’s Shweta Swaroop and WTW’s Chiaki Tanaka stressed that genuine change depends on inclusive cultures, deliberate mentoring and sponsorship, and early access to P&L and STEM pathways.

They urged women to back their own readiness, reject stereotypes and focus on impact, not titles, as they advance. 

Pricing for risk and patience 

If 2025 was the year cat bonds went mainstream, 2026 looks set to test just how deep that market integration runs.  

Record issuance last year – up 44% to nearly US$24 billion – underlined the asset class’s new status as a core pillar of reinsurance strategy rather than a tactical alternative. 

Now, with a softer market and capital still abundant, the question is whether sponsors and investors can stay disciplined. 

While 2025 proved resilient, factors shaping 2026 suggest a more balanced phase.  

AM Best, in a recent report, observed that capacity inflows into the ILS market are now outpacing demand.  

The resulting excess capital continues to compress spreads, with the weighted average spread for 144A property cat bonds declining to 7.08% in 2025 from 8.35% in 2024.  

This trend has carried into early 2026, where the average spread on in-force cat bonds has eased to around 7.6% from 7.8% a year ago, AM Best showed. 

Spread compression makes cat bond pricing more attractive to cedents relative to traditional reinsurance, supporting continued engagement from sponsors. 

Meanwhile, returns have also normalised.  

Swiss Re’s Global Cat Bond Index delivered an 11.4% gain in 2025, down from 17.3% in 2024, while the ILS Advisers Index posted 11.5%, compared with 13.1% the prior year.  

The decline in average spread level will lead to lower returns for the cat bond market, all else equal. 

Loss experience, however, was manageable despite isolated hits – notably the Hong Kong-listed IBRD CAR Jamaica 2024, which saw a full loss of US$150m principal following Hurricane Melissa.  

Meanwhile, for cyber-ILS, with the novelty wearing off and abundant capacity in the primary and reinsurance markets, along with muted demand for coverage, AM Best suggests that growth will be modest for now.  

The outlook for 2026 points to slower but sustained issuance.  

Capital released from maturing bonds in 2025 will support new transactions, though some investors may opt to take profits rather than fully redeploy.  

Losses were manageable, yet the scars from aggregate covers and multiple event seasons still linger. It’s no surprise that many managers are tightening definitions and preferring transparent, indemnity-based layers. 

So where does that leave us?  

The 2026 ILS story could be one of maturity. The cat bond market has earned its legitimacy.  

What comes next will be about resilience rather than growth for growth’s sake. The sugar high is fading; sustainability is the new test, and it will be a market for those who can price risk, and patience, correctly. 

People moves

Lockton has tapped Aon veteran Livy Dai as China CEO. 

Coface taps AIG’s Priscilla Ng as commercial director for Singapore. 

Gallagher Australia has appointed Marsh’s Johannes-Daniel Veldsman as chief commercial officer. 

Willis’ Kelsie Makepeace has relocated to the Middle East to lead placement strategy execution within the Dubai International Financial Centre. 

Do check out our weekly people move round-up to stay up to speed on the most important appointments in the region. 

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