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US insurers have minimal exposure to ILS and cat bond market – report

September 14, 2022

US insurers have minimal investment exposure to the insurance-linked securities (ILS) and catastrophe bond market, despite the fact that this asset class has seen significant growth in recent years, according to a new report by AM Best.

In its recent Best’s Commentary, AM Best stated that US investments in the ILS and catastrophe bond market are highly concentrated, with only five companies accounting for 70% of industry investments. US insurers hold about $850 million of the approximately $33 billion in outstanding catastrophe bonds despite the generally higher returns these bonds offer.

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