Speaking with Adderley, we asked for his perspective on how a softening reinsurance market could influence demand for various ILS structures, as issuance in the cat bond space in the first half of 2025 hit new heights on the back of a record Q1 and Q2.

“You obviously have more ILS funds who are focusing solely on cat bonds. There are so many major players out there in the market now, which have become very large.

“I also think it’s a case of year-on-year education catching up. Investment bankers and brokers have been talking to people for a long time, and all that time and effort is finally paying off, with more market participants getting involved.”

When we last spoke to Adderley around the launch of our Q1 2025 cat bond and ILS market report, he suggested that the momentum being seen within the market was not going to slow down.

Adderley was spot on, as a total of eight new sponsors made their debut in the cat bond market in Q2 2025.

According to Adderley, this continued growth is a testament to the efforts of investors, arrangers, brokers, and bankers over the years.

“It starts compounding. It’s been building, and I think that’s what we’re seeing now. I think every year it seems to multiply. One becomes two, two becomes three and a half, then there’s a jump and three and a half becomes seven, and seven becomes nine, and then nine becomes 18.

“I also believe the education of understanding the market is better for the new and first-time sponsors. They’re not scared about it even when you take into account the amoun tof documentation that goes into a cat bond… the consistent education really helps these first-time sponsors understand the market a lot better too.”

Looking ahead to the second half of 2025, we asked Adderley whether he sees signs of capital raising among ILS funds, and whether he anticipates significant activity before year-end.

“I recently asked this question to a client of mine about raising of capital. I personally have not heard any great stories of someone raising let’s say $400 million or $500 million of real capital.

“Have I heard of attempts to raise $50 million or $100 million? Yes. Have they succeeded? No.

“But if capital is raised, do I think it would go into ILS? Yes, I do.

“I think we’ve seen over the last couple of years, with the exception of Mereo, that it’s hard to raise capital for a rated balance sheet. The ILS funds or investing through an ILS platform on a bespoke basis seems to be obviously easier, it’s obviously quicker, it’s obviously cheaper. I think we’ll see that.”

Based on how the market has performed so far this year, with the issuance of cat bonds that have settled in the first half of this year at $17.6 billion, which is just $133 million below the annual record for issuance, we asked Adderley about the likelihood of the market surpassing the record $20 billion figure this year.

“Are we going to do more than $3 billion? The answer is yes, because I don’t know what’s going to stop the momentum.

“At the very least, we’ll hit the average, and given how close we are, how could we not? I think we’ll get there,” said Adderley.

Click here to view the full report.

First Published In Artemis, July 2025

Share
X.com LinkedIn Email Save as PDF
More Publications
Appleby-Website-Privacy-and-Data-Protection
25 Jun 2025

Impact of Privacy Law on Bermuda Business

On 1st January 2025, Bermuda’s Personal Information Protection Act 2016 (PIPA) came into full forc...

Appleby-Website-Regulatory-Practice
25 Jun 2025

Simplified Due Diligence in Bermuda

Simplified Due Diligence (SDD) and Reduced Due Diligence (RDD) are critical features of a modern, ri...

Appleby-Website-Employment-and-Immigration
23 Jun 2025

Practical Tips for Conducting Workplace Investigations

Allegations of harassment, bullying or other misconduct in the workplace can create a legal mine fie...

Bermuda-1024x576-1
19 Jun 2025

Bermuda encourages investment with residential certificates

On March 31, 2023, the Bermuda Government replaced its previous tool intended to attract capital to ...

Appleby-Website-Insurance-and-Reinsurance
11 Jun 2025

Bermuda Paves the Way for Captive Insurers with New Stablecoin Policy

The Bermuda Monetary Authority (BMA) has announced a significant new policy framework that allows ca...

Appleby-Website-Insurance-and-Reinsurance
10 Jun 2025

Bermuda benefits from a strong and capital efficient regulatory regime

Bermuda’s long-term reinsurance sector is experiencing a new phase of complexity and scrutiny but ...

050-Insolvency-Restructuring-Grid-Image
9 Jun 2025

Bankruptcy & Restructuring – To Enforce, or not to Enforce

Bermuda’s flagship restructuring process is the appointment of provisional liquidators, whose powe...

ICLG Fintech 21 cover
5 Jun 2025

Digital transformation done right (Bermuda)

As any specialised tech lawyer or technology consultant will tell you, digital transformation projec...

Appleby-Website-Insurance-and-Reinsurance
2 Jun 2025

2025 Global Financial Crisis Stress Test: Bermuda

The Bermuda Monetary Authority (BMA) has recently published instructions for a significant data coll...

Bermuda-1024x576-1
22 May 2025

Corporate real estate acquisition in Bermuda

Corporate real estate acquisitions in Bermuda are a matter of careful balance. That is because, a...