Index triggers a dying breed

The use of index triggers in insurance-linked securities transactions is on the decline according to Willis Towers Watson’s Third Quarter ILS Market Update. The percentage of transactions utilising index triggers has declined from 66% in 2007 to 40% in 2018, while indemnity triggers have risen from 34% to 60% in the same timeframe. Index triggers are still common for retro transactions, either via catastrophe bonds or ILS transactions, as well as poorly understood or modelled perils. The third quarter of this year has so far seen five non-life ILS issuances, totalling $1.6bn, edging out the previous third quarter record of $1.4bn.

Blurred image of Reactions article content
Blurred image of Reactions article related content