At a glance
- Tolen said the discussion has moved from blanket concern toward assessing how managers identify, measure and manage climate-related risk, including the resources and staff on their teams and "how conservative a manager is in their analysis above and beyond the off-the-shelf models."
- New Holland Capital chief executive and chief investment officer Scott Radke said vendor models, proprietary models and climate-condition data sets have transformed risk analysis.
- Tolen told investors to focus on the period they actually underwrite, often 12 months.
Climate change was once a top concern in ILS, but better data has shifted the debate to how managers measure it, Cambridge Associates' Joe Tolen said at the ILS Convergence 2026 conference in Hamilton. "The data has gotten a lot better, and we have gotten investors and ICs much more comfortable."
Tolen said the discussion has moved from blanket concern toward assessing how managers identify, measure and manage climate-related risk, including the resources and staff on their teams and "how conservative a manager is in their analysis above and beyond the off-the-shelf models."
New Holland Capital chief executive and chief investment officer Scott Radke said vendor models, proprietary models and climate-condition data sets have transformed risk analysis. "Most of the ILS managers with whom we have conversations are engaged in some way with climate experts to help inform their judgment," he said, whether as consultants or on staff. He added that better quantitative explanations help allocators translate technical analysis for trustees and other decision-makers who may not specialise in catastrophe risk.
What allocators are asking managers
Tolen told investors to focus on the period they actually underwrite, often 12 months. "We are not asking investors to bet on the next 30 years of what could happen with climate change," he said. Nidhi Sharma, director and senior portfolio manager at Alpha Alternatives, PSP Investments, pointed to modelling soft and hard market scenarios and expectations of losses and events, and mentioned diversification such as casualty ILS, which the report describes as an emerging market.
The Bermuda Stock Exchange listed 169 new cat bond and ILS structures across three quarters, according to our 12 October report, which cited Artemis.bm. The exchange had 731 cat bond and related ILS listings, almost 93 per cent of a market it sizes at $67.4 billion. Radke said climate risk should not be the thing that deters people from investing.
Reported by the Cat bonds & reinsurance desk from Royal Gazette Bermuda Re. Published . Corrections