Demand Is Moving Beyond Price

In September 2026, Artemis reported that 28% of respondents to Moody’s Ratings’ annual survey of reinsurance buyers expect to increase their use of alternative capital in 2027. The remaining respondents expect their usage to remain unchanged, indicating that insurance-linked securities have become a durable component of reinsurance purchasing rather than a temporary response to scarce traditional capacity.

Buyers cite diversification, multiyear protection and capital management as important benefits. Catastrophe bonds remain the preferred structure, selected by 83% of respondents, while collateralised reinsurance also attracts favourable interest. These instruments can give cedants access to differentiated investors, stagger maturities and reduce dependence on a limited panel of balance-sheet reinsurers.

A Broader Capital Toolkit

The result should nevertheless be interpreted carefully. The public article does not disclose the survey’s sample size, and intentions do not always translate into completed transactions. Alternative capital also brings basis risk, modelling uncertainty, collateral arrangements and transaction costs that may be disproportionate for smaller programmes.

For captive owners, the relevant question is not whether ILS should replace traditional reinsurance. It is where capital-market capacity can improve resilience or secure terms that are difficult to obtain elsewhere. Peak property risks remain the natural starting point, but continued innovation may broaden the range of insurable perils and structures.

Boards should ask advisers to compare pricing, coverage certainty, duration, counterparty exposure and claims mechanics across traditional and alternative solutions. The growing interest identified by Moody’s confirms that a well-designed reinsurance strategy increasingly requires access to both markets.