ILS Discipline Holds as J.P. Morgan Cites 8% Capital Growth; AIG GI Underwriting Income Rises 10%
By The Reinsurance Daily Editorial ·
ILS Discipline Holds as J.P. Morgan Cites 8% Capital Growth; AIG GI Underwriting Income Rises 10%
Twelve Securis Consolidates ILS Teams Amid Leadership Change
Twelve Securis is combining its separate catastrophe bond and private ILS fund management teams into a single unit. This restructuring coincides with the planned departure of Head of Securis and CUO for private ILS, Raphael Schwartz, at the end of the year. The firm, part of the broader Twelve Capital group which manages $4.65 billion in assets, aims to streamline its investment process and operational structure. This move integrates the management of two distinct but related asset classes under a unified leadership, signaling a push for greater efficiency and synergy across its alternative capital platform.
J.P. Morgan: ILS Capital Remains Disciplined Despite Record Cat Bond Issuance
J.P. Morgan analysts report that alternative reinsurance capital providers are maintaining underwriting discipline despite record-breaking catastrophe bond issuance. While Q2 2026 saw new issuance reach $11 billion, total alternative capital has only expanded by 8% since H1 2025. This controlled growth indicates that investors are not deploying capital indiscriminately. The market absorbed significant maturities, with net growth in outstanding cat bonds at a more modest $7 billion. Pricing reflects this discipline, with the average spread on new deals at 3.93% and the weighted average coupon at 8.82%, levels that continue to attract capital without signaling a return to soft market dynamics.
J.P. Morgan's analysis highlights that alternative capital investors have shown no sign of undisciplined deployment, with total alternative reinsurance capital growing just 8% since H1 2025 despite record catastrophe bond issuance.
Colombia Launches Parametric Program for Smallholder Farmers with IDF Support
The Colombian government, with assistance from the Insurance Development Forum (IDF), UNDP, and Germany's BMZ, has secured parametric insurance coverage for its smallholder agricultural sector. The program provides $20.14 million in protection against climate-related perils. This initiative marks the first project to be implemented under the Tripartite Agreement established in 2023 between the organizations. The structure leverages parametric triggers to ensure rapid payouts following a disaster, aiming to build financial resilience for a vulnerable economic sector.
AIG Reports 10% Increase in Q2 General Insurance Underwriting Income
American International Group (AIG) announced that its General Insurance division produced strong results for the second quarter of 2026. The unit's underwriting income increased by 10% compared to the same period last year. This performance, reported for Q2 2026, suggests continued rate adequacy and effective underwriting execution within its global portfolio. The result provides a key data point on profitability trends for large, diversified commercial lines carriers in the current market environment.
Crave Foods Withdraws Lawsuit Against Insurance Agency
Crave Foods, the maker of Chipwich products, has voluntarily withdrawn one lawsuit it had filed against its insurance agency, a case that had been proceeding in a New Jersey court. The withdrawal, which occurred in August 2026, brings an end to the litigation between the food manufacturer and its retail broker. The details surrounding the reasons for the withdrawal or whether a settlement was reached were not disclosed in the filing.
Illinois Governor Grants DOI Authority to Overturn Insurance Rate Changes
Illinois Governor J.B. Pritzker has signed legislation granting the state's Department of Insurance (DOI) new powers to review and overturn previously approved rate changes for auto and home insurance. The two bills, signed into law, represent a significant shift in the regulatory environment in Illinois, the nation's 6th most populous state. This move introduces a mechanism for political intervention in the actuarial-driven pricing process, a development that will be closely monitored by all carriers writing personal lines business in the state for its potential impact on rate adequacy and portfolio profitability.
Key Takeaways
- The J.P. Morgan data showing only 8% growth in alternative capital despite record cat bond issuance is a key negotiating point; use it to counter arguments that a flood of new capacity justifies rate reductions on property-cat treaties.
- The Colombia parametric program launch, supported by the IDF, shows a replicable model for sovereign risk transfer. This structure is highly compatible with the disciplined ILS capital highlighted by J.P. Morgan, suggesting a growth vector where transparent, data-rich parametric risk is matched with discerning institutional investors.
- The new Illinois law giving the DOI power to overturn approved rates introduces significant political risk into a major market. This could suppress needed rate increases for carriers like AIG, trapping capital in an underperforming personal lines market and creating a drag on future underwriting results.
- AIG's 10% increase in GI underwriting income sets a strong profitability benchmark. When meeting with cedents, this figure can be used to validate the current hard market pricing and justify maintaining firm terms, particularly on programs with less favorable loss experience.
- Consolidation at Twelve Securis, merging cat bond and private ILS teams, signals a move towards greater scale and efficiency in the ILS sector. This may lead to a concentration of capacity with larger managers, potentially reducing counterparty diversity for cedents and increasing the importance of strategic partnerships with major ILS platforms.
Sources
Twelve Securis combining cat bond and private ILS management teams, as Schwartz to depart — artemis.bm
ILS and alt capital remains disciplined amid record cat bond market growth: J.P. Morgan — artemis.bm
Colombia secures parametric insurance for smallholder farmers, assisted by IDF, UNDP, BMZ — artemis.bm
AIG’s General Insurance Q2 Underwriting Income Up 10% — insurancejournal.com
Chipwich Maker Withdraws Lawsuit Against Insurance Agency — insurancejournal.com
Pritzker Signs Bills Giving Insurance Department Power to Overturn Rate Changes — insurancejournal.com