MultiStrat’s growth across the ILS market to continue throughout 2025: CUO
During a recent interview with Artemis, Kier James, Chief Underwriting Officer of MultiStrat, discussed the firm’s recent growth across the insurance-linked securities (ILS) market, while also highlighting how retro market conditions have become more favourable for buyers throughout recent months.
Looking back, 2024 was a particularly memorable year for MultiStrat, the specialist underwriter, reinsurance investment facilitator and casualty insurance-linked securities (ILS) firm, with the company writing over $500 million in premium on behalf of its investors during the year.
Speaking with Artemis around the 2025 Bermuda Risk Summit, James revealed that MultiStrat expects this growth to continue throughout 2025.
At the same time, James notes that the wider non-catastrophe ILS market has demonstrated significant growth over the last 16 months, roughly tripling in size.
“Currently, non-cat ILS represents only approximately $3-4 billion of capacity, but the market consensus is for this to reach about $10 billion by 2026, which is something MultiStrat agrees with,” James explained.
“In terms of what has been the driver of this growth, there are multiple factors that can be pointed to. We’ve found in recent months that established cat ILS funds are increasingly exploring non-cat ILS, often in partnership with specialist non-cat ILS practitioners. These fund managers are looking to diversify their offering away from the higher volatility property catastrophe offering.”
“In addition, new investors, some of whom have not previously invested in the insurance space, have started to explore investments in non-cat ILS,” James continued.
“Typically, these investors are looking for lower volatility insurance business, with an appetite for longer duration risk. Investors have been attracted by the potential leverage, and associated investment returns, that can be created by appropriate non-cat ILS structures. Such investors are also often sitting on large amounts of assets and are looking for products that allow them to further enhance returns.”
As well as this, the CUO stated that another driver of growth – which applies to the entire ILS market – has been the rapid expansion of managing general agents (MGAs), for whom additional third-party capital is highly attractive due to the fact that it reduces their reliance on traditional reinsurance capacity.
Addressing this, James said: “Many MGAs are worried that their reinsurance providers may be actively competing with them, or that they’re going to do so in the future, armed with the knowledge they’ve gained from their MGA relationship. These MGA have increasingly sought to attract ILS capacity and have demonstrated a willingness to create structures that align with investor requirements.”
Furthermore, the CUO also noted that MultiStrat has spent a considerable amount of time educating potential investors on the non-cat ILS product, which can often appear more complex than catastrophe ILS.
“This effort is beginning to bear fruit, with the assistance of new entrants into the space who have helped raise awareness among industry participants and potential investors alike,” James said.
Shifting attention over to the retro market now, James explained that market conditions in 2025 so far have been more favourable for buyers in recent months, particularly for higher attaching layers, with broking group Howden reporting a 13.5% risk-adjusted decline in property retrocession rates at the January 2025 reinsurance renewals.
“Evidence suggests that the California wildfires have led to a stabilization of rates and markets are holding the line on terms,” James noted.
“This stabilization appears to be spurring additional capacity to enter the alternative capital market, though investors are being highly selective, favouring those with a longer track record of strong returns before bolstering allocations.”
“Demand for buyers for retro protection after some $100 billion of cat losses in the five months from September alone is set to remain strong and there have been suggestions that some cedents are re-entering the market looking to top-up cover,” James concludes.
James also recently told Artemis that MultiStrat believes that Bermuda will continue to maintain its dominance of the ILS market as it broadens beyond catastrophe-focused ILS into casualty and specialty lines of business.
Read all of our interviews with ILS market and reinsurance sector professionals here.
