Media coverage
Asia Insurance Review features Michael Stahel's views on the resilience of ILS
Asia Insurance Review recently published an article that discusses how insurance-linked strategies (ILS) have remained resilient despite ongoing macroeconomic volatility and geopolitical tensions. It includes comments by Michael Stahel, Partner at LGT Capital Partners, who explains that ILS continue to attract institutional investors, given their potential to generate returns and also stabilize portfolios due to their low correlation with traditional financial market movements.
Michael notes that the ILS market is currently in a phase of gradual softening, with overall rates having decreased by roughly 10% compared to the same point last year. However, he emphasizes that this softening is not uniform — with riskier transactions facing greater pressure from high demand, while higher-attachment remote transactions are still relatively resilient. Pricing remains well above historical soft market levels and continues to support attractive risk-adjusted returns.
A significant share of the asset class's resilience can be attributed to the re-underwriting cycle of 2022. Following a period of elevated catastrophe event activity beginning in 2017, investors such as LGT Capital Partners shifted their focus to higher attachment points, improved contract terms and stricter underwriting discipline — changes that have materially strengthened portfolio construction and delivered superior returns in recent years.
Michael also highlights how institutional investors’ perception of ILS has evolved from a pure yield focus towards a more balanced view that emphasizes diversification benefits. ILS returns are driven by natural catastrophe events and remain largely uncorrelated with equities, credit or interest rates — a quality that proved its value during recent periods of broader market volatility.
Read the article in the PDF below.
