Insurance-Linked Securities Move from ‘Alternative’ to Mainstream

By Insurance Journal

A new survey from Willis Towers Watson (WTW), has reported that the insurance-linked securities (ILS) market is here to stay. The Global ILS Market Survey finds that the most active groups in the ILS market – end investors, ILS funds, and buyers – have accepted that reinsurance products backed by “alternative” capital is the mainstream after weathering losses in 2017, according to the WTW publication.

Some key findings of the survey reveal this trend:

The survey found that 58 percent of responding cedents use some ILS capacity, with one in four deriving more than 30 percent of capacity from ILS.

Further, the report added, cedents and ILS funds believe that ILS will continue to grow including entry into areas outside of property catastrophe…

The survey found that close to half of cedents have recovered claims from ILS capacity providers and almost all of those who recovered claims have had positive experiences.

Furthermore, the Global ILS Market Survey has displayed the attitude from end investors of viewing reinsurance as an “established asset class,” countering a predominant perception that “rising yields in other asset classes would divert capital from ILS.” For more on the WTW survey, visit here.

Another survey on cyber insurance was recently released by Zurich Insurance Group Ltd. and Advisen Ltd. in the eighth annual Information Security and Cyber Risk Management report. This survey found that the takeup rate for cyber insurance to be increasing dramatically, but that there are significant discrepancies between purchasing preferences for companies based on size.

According to the report, nearly twice as many large companies, which are defined as firms with more than $1 billion in revenue, made changes to their cyber security controls because of the European Union’s General Data Protection Regulation compared with middle market companies, defined as firms with less than a billion in revenue.

Read more here

24 Oct 2018

Tagged in: cybersecurity, data privacy, ILS, innovation, insurtech

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