A survey of 105 institutional investors across the DACH-region undertaken by the German association for alternative investments, shows that an increasing number of allocators in the region are choosing catastrophe bonds and insurance-linked securities, while more indicate they intend to enter the sector.
The organisations annual survey highlights why institutional investors in the DACH-region (Germany, Austria, and Switzerland) invest in private markets and alternative strategies, as well as where there focus will be in the future.
There are a number of interesting data points relevant to catastrophe bonds and insurance-linked securities as an alternative asset class, most important of which are the rising investor allocations to and interest in ILS assets.
The BAI asked investors what alternative asset classes they are already invested in, with ILS one of the categories.
In 2025 the response was 9% of surveyed institutional investors were allocating to ILS, but in the new 2026 survey this figure has risen to 11%.
Promisingly, the BAI’s survey also adds on data for the planned entries of new investors to an asset class over the next twelve months (the Outlook in the chart below), which raises the figure to 14%, assuming those already allocated to ILS maintain those investments.
The BAI said that the survey shows that in general, “Investors are deepening what they already own rather than expanding extensively into new asset classes.”
Notably though, on the increase of 3% from 2026 to the Outlook, ILS does compare well with only infrastructure debt having a higher percentage increase in its Outlook (in the chart above).
Interestingly, the BAI breaks out hedge funds and liquid alternatives as its own asset class, which of course some might place catastrophe bond funds in, given they can have attractive liquidity for allocators, depending on the fund structure.
The BAI said, “Hedge Funds and Liquid Alternatives are back. After years at the margins, adoption climbed from 15 % to 21 % and is expected to reach 23 %, showing sustained momentum across all three periods.”
On average, insurance-linked securities (ILS) stacks up well, as an asset class that is attracting increasing investor interest among institutional allocators in the DACH region.
But allocations remains small so far, which is typical given most investors only commit a small percentage of their overall assets to cat bonds and ILS.
The BAI survey found that the average allocation of already invested LPs, among those polled, into cat bonds and ILS is 2.6%.
When looking across the entire surveyed institutional portfolio, which equates to €2.9 trillion in total AuM held by the LPs, just 0.1% is allocated on an AUM weighted basis.
But, as a straight percentage of the total institutional portfolio, allocations to ILS and cat bonds have increased, from 0.2% in 2025 to stand at 0.3% in the 2026 survey results.
Which shows the potential for more assets to flow from investors in the DACH region to the ILS asset class over-time, as awareness and interest keeps rising.
