Insurance-linked assets gain ground with institutions
Institutional investors are increasing allocations to insurance-linked assets, with a clear preference for structures that offer scalability, transparency, and direct access to underwriting returns, according to new research from Gallagher Securities.
The report, Unlocking Insurance Capital: The View from Investors, finds that 60% of surveyed investors plan to increase their exposure to insurance-related assets — and highlights that how capital is deployed is becoming as important as how much is available.
Catastrophe bonds remain the primary destination for new allocations, with 79% of respondents targeting the asset class. Their appeal lies in repeatable deal mechanics, clearly defined downside, and post-loss transparency, allowing investors to scale exposure efficiently and evaluate risk with confidence.
Sidecars and structured balance sheet solutions are also attracting strong interest, with 53% of investors planning allocations. These structures provide alignment with underwriting performance and access to more tailored or less commoditised risk.
By contrast, appetite for direct investments in insurance company equity or debt remains more limited, with only 21% of respondents targeting these strategies, reflecting the higher operational complexity and governance requirements associated with ownership structures.
Jason Bolding, chief executive of Gallagher Securities, said: “We’re in a market where capital wants access to high quality underwriting, and insurers want stable, scalable capacity. The value comes from building the bridge between the two.”
The report identifies several core drivers behind investor preferences, including non-correlation with public markets, diversification benefits, and the ability to access underwriting returns as a distinct source of performance.
Property catastrophe remains the dominant area of interest, cited by 72.9% of respondents, followed by cyber (27.1%) and casualty (22.9%), reflecting both established ILS markets and growing appetite for diversification.
Gallagher Re notes that as the investor base grows, so too does its sophistication, with greater emphasis on transparency, governance and structure-specific return expectations.
For more information contact Gallagher Securities.
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