Asia is expected to see a steady and continuing increase in insurance-linked securities (ILS) activity, with regionally tailored catastrophe bonds likely to become more of a feature, as heightened climate awareness drives a need for risk transfer and reinsurance, Fitch Ratings has said. Which would be welcomed by cat bond and ILS fund managers and investors, as the portfolio diversification offered by non-US cat bonds can be very attractive. In one of its reinsurance market reports timed around the Monte Carlo Rendez-vous event, Fitch Ratings said it continues to see potential for Asian cat bond expansion. Summing up, Fitch said, “APAC reinsurers are exploring alternative risk transfer options such as catastrophe bonds. Climate volatility and changing risks require continued innovation in risk transfer strategies, despite strong capitalisation.”