2026-08-11 · Source: ARTEMIS Reinsurance
Summary in 3 Points • AI is helping expand the catastrophe bond market into new sectors like data centre risks • Ethan Powell of Brookmont Capital Management highlights AI's role in improving transparency and deal structures • AI advancements could lead to new cat bond products and more creative market opportunities --- Ethan Powell, Principal and CIO of Brookmont Capital Management, discusses the transformative impact of artificial intelligence on the insurance-linked securities and catastrophe bond markets. AI is enhancing transparency and accuracy in evaluating risks and structuring deals, which benefits investors and sponsors alike. Powell notes that AI's predictive capabilities are improving, though there is room for further development, particularly in assessing tail and event risks. The technology's potential to expand the cat bond market into areas like data centre risks is particularly promising, as it enables better risk evaluation and product development. Powell also envisions AI facilitating the creation of new investment products, such as a dedicated cat bond data centre fund, enhancing Brookmont's offerings.
The integration of AI into the catastrophe bond market could present new opportunities for the London insurance market, particularly in underwriting and pricing complex risks like data centres. As AI improves transparency and risk assessment, insurers may find more accurate pricing models and innovative product offerings. The potential expansion into data centre risks could lead to new policy wordings and increased capacity in the market. Additionally, AI-driven insights could enhance claims management and risk communication, ultimately benefiting both insurers and investors in the London Market.