Five Questions with Cate Kenworthy, Managing Director, Howden Capital Markets & Advisory

As investor sentiment in reinsurance and insurance-linked securities (ILS) continues to evolve, capital allocation trends are shaping both deal flow and strategic direction. Cate Kenworthy, Managing Director, Howden Capital Markets & Advisory discusses shifting investor appetites, the key themes set to dominate upcoming conferences, and the forces likely to drive decision-making ahead of 2026 renewals. 

Looking back over the past year, what have been the most notable developments or shifts for investor appetite in the market? 

Investor appetite in reinsurance and insurance-linked strategies has evolved significantly over the past twelve months. 

Early and contrarian investors who entered the market quickly after Hurricane Ian are now nearly fully deployed and remain committed to the space, closely monitoring rates and terms while exploring diversification into non-catastrophe risks and different structures such as Lloyd’s. 

Meanwhile, market-responsive investors continue to deploy capital, attracted by strong risk-adjusted returns and relative value compared to high-yield credit, which is trading at historically tight spreads. This also includes the entrance of new investors in the ILS space. For example, a landmark move came with California Public Employees' Retirement System entering the market for the first time, signalling deepening institutional confidence in the asset class. 

Credit-focused managers are showing growing interest in casualty and whole-account sidecars, drawn by opportunities in float management and duration yield. Structured investments, including preferred equity and mezzanine debt, are gaining momentum as investors prioritise contractual yield and downside protection, even at the expense of control or upside potential. 

A further evolution in reinsurance capital sourcing is the emergence of structured investment platforms, where investors seek partnerships with entities that source risks, coupled with a fronting carrier, creating attractive new investment opportunities. 

Looking back on this year’s conference season, what themes dominated discussions around capital and investors? 

Several interconnected themes stood out. 

Capital inflows and the potential for market softening were front and centre. Many discussions focused on how profits are being reinvested and new money is entering the sector — prompting debate over how quickly conditions could ease heading into 2026 and 2027. 

At the same time, the scalability and reserving risk of casualty exposures drew heightened scrutiny. With more capital targeting casualty, investors and underwriters alike questioned whether underwriting standards and reserving discipline can keep pace with this influx, and how duration and alignment risks are being managed. 

Finally, there was strong interest in innovation within capital structures — particularly asset-based lending and hybrid ILS platforms. The discussion centred on how to scale these models effectively while maintaining underwriting discipline and alignment of interests between investors and risk carriers. 

What shifts are you seeing in client priorities, expectations, and behaviours? 

Across the board, investors and allocators are placing greater emphasis on liquidity, transparency and structured yield as they seek more predictable and efficient capital deployment. 

There is also a clear shift toward yield and downside protection. Structured investments, notably preferred equity and mezzanine debt, are favoured for their contractual coupon and limited downside, often preferred to traditional underwriting-linked upside. 

Additionally, strategic partnerships between both traditional and alternative asset managers and re/insurers are deepening, mirroring a significant trend in the life insurance sector. These collaborations allow asset managers to leverage underwriting expertise and manage insurance float more effectively, reflecting a long-term alignment of interests between financial and insurance capital. 

In your view, what factors are likely to shape deal activity or strategic decision-making over the next 6–12 months? 

Deal activity is likely to be driven by a combination of capital management pressures and investor selectivity. Many funds are approaching critical points in their life cycles, prompting a sharper focus on liquidity solutions and flexible exit routes. These dynamics are encouraging structures that allow investors to maintain exposure to insurance-linked returns while managing their own liquidity requirements. 

The search for yield will also influence behaviour, but it comes with risk. With credit spreads at compressed levels, investors are ramping up their education on the re/insurance and ILS space as they are drawn by the potential for attractive risk-adjusted returns. The challenge will be balancing increased capital flows with underwriting discipline, a theme that will continue to separate short-term opportunism from sustainable performance. 

Investor alignment will remain central to decision-making. As platforms evolve, clarity around how risk and reward are distributed, and who retains control, will be a determining factor in capital formation. Structures that demonstrate transparency and alignment of interests are most likely to succeed. 

Recent IPOs like Accelerant and Neptune Flood highlight these dynamics in practice. Accelerant’s listing illustrated the market’s sensitivities to concentration and complexity, while Neptune’s successful debut underscored investor appetite for scalable, tech-led underwriting models. Both reflect how public market scrutiny is increasingly shaping how capital providers assess risk, governance and growth potential in the (re)insurance ecosystem.  

Innovation will continue to attract new sources of capital, particularly from asset-based lending and private credit managers seeking differentiated exposures. As traditional credit markets become increasingly crowded, ILS opportunities offering contractual yield and low correlation present a compelling alternative. Innovative structures that mirror the characteristics of asset-based lending are well-positioned to meet this demand, offering scalable access to reinsurance risk in formats familiar to credit investors. 

Thinking ahead to 1.1, what market dynamics should stakeholders keep in mind? 

As the market moves toward the 1.1 renewals, three dynamics stand out. 

Investor priorities are shifting toward greater liquidity, transparency, and structural protection. Investors are placing increased emphasis on exit flexibility and cost clarity as they seek more predictable and efficient capital deployment.  

There is also greater scrutiny of underwriting discipline and how portfolios are positioned in the market between different products and lines of business will be a key focus.  

At the same time, traditional and alternative asset managers are pursuing deeper partnerships with insurers and reinsurers to manage float and gain access to underwriting expertise.