Past several decades have been an extraordinary time period in the history of extreme catastrophes e, g., the September 11 terrorist attack (2001), the South Asia tsunami (2004), and Hurricane Katrina (2005). Life insurance industry also faces catastrophic risk events- longevity and mortality risks. Facing this insurance/reinsurance capacity shortage, raising additional equity capital is one of solutions. Then, innovation occurred. Insurance-linked securities (ILS) was created. Insurance-linked securities is a means of transferring insurance risks to the capital market. Since the inception of the market in 1996, ILS has evolved to become a strong complement to traditional reinsurance, providing benefits to transaction sponsors, i.e. ceding companies. This study explores the prospects for ILS by focusing on some issues, First of all, the product features of ILS, reviewing the structure, trigger mechanism, perils, capacity, pricing and costs of ILS. Secondly, this will make some analysis for the international market development of ILS. Thirdly, This study will turn on to the potential market in Taiwan. The study tries to review the potential market in Taiwan from property casualty insurance and life insurance respectively. Finally, with the analysis in various aspects, hopefully, the study can provide solid conclusion for ILS development in Taiwan. / Past several decades have been an extraordinary time period in the history of extreme catastrophes e, g., the September 11 terrorist attack (2001), the South Asia tsunami (2004), and Hurricane Katrina (2005). Life insurance industry also faces catastrophic risk events- longevity and mortality risks. Facing this insurance/reinsurance capacity shortage, raising additional equity capital is one of solutions. Then, innovation occurred. Insurance-linked securities (ILS) was created. Insurance-linked securities is a means of transferring insurance risks to the capital market. Since the inception of the market in 1996, ILS has evolved to become a strong complement to traditional reinsurance, providing benefits to transaction sponsors, i.e. ceding companies. This study explores the prospects for ILS by focusing on some issues, First of all, the product features of ILS, reviewing the structure, trigger mechanism, perils, capacity, pricing and costs of ILS. Secondly, this will make some analysis for the international market development of ILS. Thirdly, This study will turn on to the potential market in Taiwan. The study tries to review the potential market in Taiwan from property casualty insurance and life insurance respectively. Finally, with the analysis in various aspects, hopefully, the study can provide solid conclusion for ILS development in Taiwan.