The ILS market has delivered its third consecutive year of consistent, positive returns, supported by disciplined underwriting and a benign insurance loss environment. The 2025 Atlantic hurricane season was intense from a meteorological perspective with three Category 5 hurricanes and record-breaking events such as Hurricane Melissa. Insured losses remained limited, particularly given the absence of U.S. landfalls. This combination of high natural hazard activity and low insurance impact once again highlighted the resilience and diversification benefits of the asset class. Against a backdrop of record cat bond issuance, tightening spreads, and constructive investor sentiment, the ILS sector enters 2026 from a position of strength.

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