Investors in ILS benefited from very attractive return momentum in 2023. The key driver of these strong returns was the much higher premium environment, coupled with a revised portfolio allocation strategy that mitigated loss impacts to a significant extent. For primary insurance companies, however, 2023 was one of the costliest years in recent history.

These primary insurance losses were mainly attributable to a series of mid-sized events, such as severe convective storms, wildfires and floods, rather than extreme catastrophe events such as a massive earthquake or hurricane.

Developments in recent years have made it increasingly apparent that climate change is now a serious concern for the insurance sector as well as for investors in ILS. The whitepaper explains how best to invest in the asset class against this backdrop.