In August 2026, Egyptian insurance-linked securities (ILS) funds experienced a significant surge, driven by the strong performance of catastrophe bonds, also known as "Cat Bonds." According to the latest data from the ILS Advisers Fund Index, the average return of ILS funds reached 1.39% during the month. This marks the best monthly performance for the ILS market in 2026 so far and the strongest since October 2025.
The ILS Advisers Fund Index, which tracks the performance of these funds, revealed that August's performance boosted the year-to-date average return of ILS funds to 6.56%. Although this is slightly above the average, the ongoing decline in reinsurance prices has had a limited impact. The index noted that the continued rise in ILS fund returns during the summer months was driven by premiums earned during the Atlantic hurricane season.
Catastrophe bonds demonstrated particularly strong performance in August, with an average return of 1.42%. This compares to an average return of 1.34% for funds that also invest in private insurance-linked securities, including reinsurance sidecars. This represents a notable increase from July, when pure catastrophe bond funds returned 0.95%, and ILS funds returned 1.23%.
ILS Advisers attributed the robust performance of catastrophe bonds in August to price movements and seasonal factors. The secondary market continued to be supported by strong investor demand and limited supply, creating favorable conditions for catastrophe bond prices. Additionally, the absence of significant loss events contributed to a 1.33% increase in catastrophe bond prices during August.
The Swiss Re Global Cat Bond Index reported a total return of 2.22% for August, driven by these price increases. According to ILS Advisers, approximately 84% of ILS fund strategies included in the index have reported their August 2026 results, with the remaining funds expected to report soon. Notably, all ILS funds that have reported results so far achieved positive returns in August.
The returns of ILS funds varied between 0.50% and 2.17% in August, reflecting differences in performance across various strategies. Even funds with lower volatility achieved a 0.50% return during the month, underscoring the overall strength of the ILS market in August. The ILS Advisers Fund Index, tracked by Artemis, is an equal-weighted index comprising 37 investment funds focused on insurance-linked securities.
The index allows for comparisons between ILS fund managers and provides insights into the performance of catastrophe bonds and reinsurance-linked investments. With all reporting ILS funds achieving positive returns in August, the Egyptian ILS market demonstrated resilience and growth during the month.
Key points
- Egyptian ILS funds recorded their strongest monthly performance in 2026, with an average return of 1.39% in August.
- Catastrophe bonds showed strong performance in August, with an average return of 1.42%.
- All ILS funds that reported results for August 2026 achieved positive returns, ranging from 0.50% to 2.17%.
