ILS’s positive horizons

The three groups active in Insurance linked securities (ILS) - end investors, ILS funds, and buyers - have weathered 2017 loss activity with a view that reinsurance products backed by alternative capital have become mainstream, according to Willis Towers Watson’s (WTW) “Global ILS Market Survey”. “Cedants and funds share the view that ILS will continue to grow, partly through increased usage, and partly by covering risks outside property catastrophe, such as property per-risk, cyber, and marine,” the report said and added that investors and cedants alike continue to show appetite for such transactions too. “End investors confirm they see reinsurance as an established asset class. The survey, therefore, is counter to some observations that rising asset yields would deter new capital inflows to ILS.” The report solidifies what has been discussed for most of 2018. In August, a survey of senior members of the Lloyd’s Market Association found that the majority believed it only a matter of time before the ILS market widens its scope to cover perils such as cyber and legacy business.

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