Artemis spoke to Adderley at RVS in Monte Carlo about the substantial growth of the cat bond market in 2025, as well as how the role of sidecars are evolving within the insurance-linked securities (ILS) space.
A joint record eight new sponsors entered the cat bond market in Q2 2025, taking the year’s total to 11. At RVS, we asked Adderley what he believes is driving this continuous wave of new sponsors.
“I think it’s just becoming more acceptable. I think the investment bankers and brokers have done a great job at educating people, and as a result, new people are more comfortable with it. I think it’s a big learning curve. More people are doing it, and people are more comfortable,” Adderley said.
In 2024, thirteen new sponsors entered the cat bond market, and Adderley noted that 2025 could be on track for a similar outcome.
“I think it’s almost built like a commercial reinsurer not having ILS plays, you almost think that you have to have it. I think most cedents now have to have a cat bond or want to be in that market to keep the reinsurance market on their toes,” he continued.
Moreover, the first half of 2025 also saw transactions covering non-cat risks total $655 million, though all of this issuance came in Q1. In light of that, we asked Adderley about the potential for more ILS transactions in areas such as cyber and casualty in the coming months.
“I think cyber has become more prevalent. We’ve seen it. I don’t think a lot of people can do it. I don’t know if we are going to see an increase. I don’t think enough people are comfortable with the pricing.
“Because, like anything, it comes down to price. You will take the cyber on if you’re happy with the price, because the price pays for the risk. I don’t know if people have enough tools yet, or knowledge or comfort to price these things, and so I wonder if you’re going to see more,” Adderley explained.
He continued: “I still think there’s an education that’s going on, unlike other catastrophe bonds. This case, I do think there’s more education, and that’s why I don’t think we see that many of them and whether it’s driven by the investors, or whether it’s driven by the sponsors, they haven’t met in the middle yet.”
Furthermore, we asked Adderley whether he believes the softening reinsurance market will affect various ILS structures going forward.
“I don’t think it’s going to affect the market in terms of doing less deals. I don’t believe that there’s going to be less catastrophe bonds or private cat bonds as a result of the softening of the rates, I don’t see that being affected at all.
“The ILS market has grown so much that it’s a way of quick money coming in and going out. So, I don’t really see anything going down.”
To end, we also asked Adderley how he sees the role of sidecars evolving in comparison to catastrophe bonds.
“So, cat bonds always grow, but sidecars are now pretty evolved as well. I think we’re going to see six, seven, maybe eight sidecars, so definitely it’s a more active space this year.”
Adderley concluded: “Obviously it’s a different situation with casualty. I don’t think you’re going to see a cat bond covering casualty risk. We all know you can do P&C property in a cat bond form, and you could do property in a sidecar. But for a specific casualty sidecar play, the question is who, in five, seven years, because sidecars take longer, who gets it right? Who does the claims handling, who gets the investment?”
First Published in Artemis, September 2025
