Gallagher Re is on the verge of releasing a survey that shows a surge in investor appetite for insurance-linked securities, as observers project a near-record cat bond issuance for the first quarter.

Gallagher Re and Gallagher Securities will release the full results of their inaugural “ILS Buyside Survey” in early May.

It includes detailed findings on investors' interest in different structures, the various lines of insurance business, and their return expectations, as well as insights into how insurers can tap into the durable and expanding source of capacity.

The authors are Jason Bolding, global head of ILS and Ben Lyon, CEO of Gallagher Securities UK and head of capital advisory.

A joint statement noted: “In 2023, the index return from ILS investments was around 14 per cent. Last year, it was closer to 11 per cent, and it may ease further.

“At the same time, investors' choices are expanding rapidly beyond cat bonds, with growing opportunities for sidecar structures and structured debt and equity deals, offering varying degrees of trade-off between liquidity and returns.”

The white paper’s findings draw on research involving more than 60 large and complex institutional investors already familiar with and investing in insurance‑related assets. Surveys were supplemented by in-depth qualitative interviews.

The individual respondents were overwhelmingly senior executives. Some 94 per cent had direct responsibility for allocation decisions.

Their firms are institutionally scaled, with more than 70 per cent managing over a billion dollars, and 16 per cent managing over $100 billion.

The survey was conducted in the fourth quarter of 2025 and the qualitative interviews were in the first quarter of 2026.

Mr Bolding said: “This is a unique moment. Capital conditions are favourable, investor appetite is strong and structures are evolving. The opportunity is to build relationships now that will matter when conditions tighten.”

A Gallagher Re statement said catastrophe bonds are likely to continue as the mainstay of the ILS and alternative capital markets, with investors stressing their liquidity, transparency and scalability. But allocators have many other options, and are ready to explore them.

The statement continued: “Significant numbers of investors are now exploring vehicles such as reinsurance and insurance sidecars — structures that allow investors to take on a share of insurers' underwriting risk, typically for a specific portfolio of policies.

“Sidecars have been of growing interest to cedants as an alternative route to reinsuring casualty lines in recent months, for example, in contrast to bond markets that remain largely focused on property catastrophe risk.

“From the investors' point of view, sidecars are less tradeable than cat bonds, but they attract a narrower pool of more expert investors, who can therefore earn a “complexity premium.”

Meanwhile, a significant minority of respondents are interested in making direct portfolio investments in insurance companies by buying either their equity or their debt.

The report said: “This can offer greater control — for example, over managing the assets associated with insurance liabilities — but dilutes pure exposure to the underwritten risks.”