ILS and alternative risk transfer: Bermuda, the global beating heart
The ILS market is expanding rapidly, as alternative capital and catastrophe bond issuance reach record levels, and Bermuda continues to dominate.
Insurance-linked securities (ILS) and alternative risk transfer solutions provide insurers, reinsurers and other organisations with access to capital market investors as an additional source of risk-bearing capacity. Over the past two decades, the sector has evolved from a niche segment focused primarily on catastrophe risk into an established component of the global risk transfer ecosystem.
The following data highlight the continued growth of alternative capital, the expansion of catastrophe bond issuance and Bermuda’s central role within the global ILS market.
Alternative capital continued to expand during 2025, reaching an all-time high of $121 bn as of 30 June. The figure highlights the increasingly important role that capital market investors play in supporting the transfer of insurance and reinsurance risk, particularly in areas exposed to natural catastrophes.
Much of this growth continues to be driven by catastrophe bonds. According to Aon Securities, issuance exceeded $21.7 bn during the 12-month period from July 2024 to June 2025, while annual property catastrophe bond issuance reached $25.6 bn in 2025.
The figures reinforce the growing importance of catastrophe bonds as a source of risk-bearing capacity. Following a period of elevated catastrophe losses and rising demand for protection, capital markets have continued to provide insurers and reinsurers with an additional avenue for accessing capital and diversifying sources of capacity.
Bermuda remains at the centre of this market. The jurisdiction accounted for 93.2% of global ILS issuances in 2025. The concentration reflects Bermuda's long-established position as a hub for insurance, reinsurance and capital markets expertise, as well as the infrastructure developed to support ILS transactions.
Listing activity also remained robust. Following a decline in total listings between 2023 and 2025, activity accelerated again during the first quarter of 2026, with total ILS listings on the Bermuda Stock Exchange increasing to 777 and the overall nominal value of listed securities reaching $68.5 bn. The figures demonstrate continued demand for Bermuda-listed ILS structures and reinforce the jurisdiction’s position as the leading marketplace for insurance-linked securities.
Growth has also been reflected within Bermuda’s regulated investment fund sector. According to Bermuda Monetary Authority (BMA) data, ILS funds accounted for 8% of all regulated funds at the end of 2025, almost double the 2023 figure.
Bermuda’s market leadership has continued to strengthen. By the end of the first quarter of 2026, the Bermuda Stock Exchange represented approximately 95% of the outstanding global catastrophe bond market, up from 93.2% at the end of 2025. The figures underline the Exchange’s central role in facilitating catastrophe bond issuance and further reinforce Bermuda’s dominance within the global ILS market.
The client base using catastrophe bonds also continues to evolve. Insurers accounted for the largest share of issuance during the most recent reporting period, while reinsurers increased their participation compared with the previous year. At the same time, the proportion of issuance originating from government entities declined, suggesting a broader shift in the composition of catastrophe bond sponsors.
The data points to a market that continues to expand in both scale and relevance. Alternative capital has become an increasingly significant source of capacity for the global insurance sector, while Bermuda remains the dominant centre for ILS issuance, listing activity and catastrophe bond structuring.
*Figures displayed are the latest available at the time of press.
For more news on Bermuda Risk Review 2026, click here.
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