Growing demand for insurance-linked securities
Tuesday September 06 2011 | 09:07 AM
The insurance-linked securities (ILS) market is poised for growth, Swiss Re predicts in its latest publication.
Re/insurers, governments, corporations are continually accessing capital market solutions to manage capital, transfer natural catastrophe related risks and finance growth, it is reported in Swiss Re’s publication, The fundamentals of insurance-linked securities.
Martin Bisping, head of non-life risk transformation at Swiss Re, said: "The ILS market is strong and poised for continued growth.
"Our investor and sponsor base is made up of stable long-term partners and we consistently generate new interest in the sector. We believe this combination will lead to a continuation of robust ILS market growth."
Matthias Weber, head of property and specialty at Swiss Re, said: "We are starting to see increasing demand for non-US peak risks."
Weber believes by offering ILS Swiss Re can combine its strong origination and distribution platforms with its ability to assume basis risk and tail risks. ILS offers the ability to transfer peak risks, allowing companies to complement and diversify their reinsurance protection.
ILS investors, a global group of institutional money managers, dedicated cat bond funds as well as multi-strategy hedge funds, continue to see relative value in a diversifying asset class with superior returns, Swiss Re reports.
The increased utilisation of parametric or index-based triggers improves transparency for investors.
The Swiss Re publication says during the recent financial crisis, some hedge funds decided to de-leverage and many secondary market investors found strong prices for their ILS positions.
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Article compliments Captive Review
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