Fitch Forecasts ILS Growth as Andrew Retrospective Highlights $1.2T Exposure Increase

By The Reinsurance Daily Editorial · August 26, 2026

Fitch Forecasts ILS Growth as Andrew Retrospective Highlights $1.2T Exposure Increase

Lockton Hires Descartes’ Meaney to Lead U.S. Parametric Team

Lockton has appointed David Meaney, formerly of parametric specialist MGA Descartes Underwriting, as its U.S. Parametric Leader. The move signals a strategic investment by a major retail and wholesale broker to internalize parametric structuring capabilities rather than relying solely on external MGA partners. This hire indicates that client demand for non-indemnity solutions has reached a critical mass, requiring dedicated in-house expertise for origination and placement. For reinsurers, this development suggests that cedants, guided by brokers like Lockton, will increasingly integrate parametric triggers into their primary policies and overall risk management programs.

Schroders Capital Advocates for ILS to Absorb Nat Cat Risk

Asset management firm Schroders Capital has publicly asserted that Insurance-Linked Securities (ILS) and broader securitisation methods are essential for absorbing the escalating risk from natural catastrophes. The statement from a mainstream asset manager with significant institutional capital reinforces the view that the traditional reinsurance and equity markets are insufficient to close the protection gap. This perspective from a capital provider signals continued, and likely growing, allocation to the ILS asset class, provided that structuring and pricing meet investor return hurdles. It positions ILS not as a niche alternative, but as a necessary, structural component of global catastrophe risk financing.

Fitch Forecasts Alternative Capital and ILS Market Growth to 2027

Fitch Ratings has issued a forecast indicating expected growth for the alternative reinsurance capital and ILS market through the year 2027. The positive outlook from a major rating agency provides a tailwind for capital formation efforts across the sector. It suggests that the recent years of improved pricing, tighter terms and conditions, and disciplined underwriting have restored confidence among third-party investors. This forecast will be used by ILS fund managers to support their capital-raising campaigns and by cedants to anticipate the availability of alternative capacity in future renewal seasons.

Hurricane Andrew Retrospective: A Modern Recurrence's Financial Impact

A look back at Hurricane Andrew underscores the immense growth in insured values, posing a severe challenge to current market capacity. Andrew caused a $26.5 billion economic loss, of which $15.5 billion was insured. At the time, reinsurers covered an outsized portion of the claims, paying for approximately 72% of the total insured loss. This event crippled multiple carriers and led to the creation of the Florida Hurricane Catastrophe Fund. Today, the same storm track would encounter vastly higher exposures; an analysis by the Insurance Information Institute notes a $1.2 trillion increase in the insured value of Florida’s coastal properties since 1992.

A repeat of Hurricane Andrew today would result in insured losses estimated between $70 billion and $90 billion, a figure that would test the limits of both the primary and reinsurance markets and would certainly trigger numerous catastrophe bonds and collateralized reinsurance layers.

New Zealand Watchdog Reports Industry Failing Māori Population

New Zealand's Financial Markets Authority (FMA) has concluded that the country's insurance industry is failing to meet the needs of the Māori population, creating a significant protection gap. Māori represent 17% of New Zealand's population, yet survey data within the report shows that 48% of Māori do not have any form of house insurance. This gap is attributed to issues of trust, affordability, and complexity, with a high percentage of participants finding insurance products difficult to understand. The findings flag a material regulatory and reputational risk for carriers operating in the region and may trigger regulatory mandates for product simplification and culturally-appropriate distribution strategies.

Inszone Continues Consolidation with Harris Insurance Services Acquisition

Continuing its national expansion strategy, Inszone Insurance Services has acquired Harris Insurance Services, a commercial and personal lines agency based in Oklahoma. The transaction marks another step in the aggressive M&A-driven growth of private-equity-backed brokerage platforms. For underwriters and carriers, the relentless pace of broker consolidation means managing fewer, but larger and more powerful, distribution relationships. While Inszone did not disclose the terms of the deal, these acquisitions concentrate premium volume and negotiating power, altering the market dynamics for carriers seeking to access retail and small commercial business in regions like the South Central U.S.

Key Takeaways

• The push for alternative capital from firms like Schroders Capital and the growth forecast from Fitch are a direct response to the exposure realities highlighted by the Andrew retrospective; the $1.2 trillion in new Florida coastal value cannot be absorbed by traditional balance sheets alone, making ILS a structural necessity.
• Lockton's hiring of a U.S. Parametric Leader from Descartes signals that sophisticated cedants are moving beyond indemnity. Underwriters must prepare for an increase in submissions with parametric triggers embedded in core catastrophe programs, requiring different modeling and basis risk analysis.
• Given that reinsurers paid 72% of the Hurricane Andrew loss in 1992, underwriters must stress-test their current portfolios against a similar loss-sharing ratio on a modern $70B+ event, as primary carriers' retentions may prove inadequate in a tail scenario.
• The finding that 48% of New Zealand’s Māori population lacks house insurance is a clear ESG signal. Reinsurers with exposure in Australia and New Zealand should query their cedants on specific actions being taken to address this protection gap to mitigate future regulatory and reputational risk.

Sources

Lockton hires Descartes’ Meaney as U.S. Parametric Leader — artemis.bm
ILS and broader securitisation key to absorbing nat cat risk: Schroders Capital — artemis.bm
Alternative reinsurance capital and ILS market growth forecast for 2027: Fitch — artemis.bm
Viewpoint: When Andrew Returns – A Look Back at a Pivotal Insurance Event — insurancejournal.com
New Zealand Insurance Industry Failing to Meet Māori Needs, Market Watchdog Says — insurancejournal.com
Inszone Acquires Oklahoma’s Harris Insurance Services — insurancejournal.com