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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 15, 2016 12:14 PM (EDT)
In this A.M.BestTV episode on location from Les Rendez-Vous de Septembre (Rendez-Vous) reinsurance conference in Monte Carlo, Monaco, insurance-linked securities (ILS) experts say the overall growth of ILS continues, but the quicker turnaround and lower costs of collateralized reinsurance have made it attractive to a larger pool of investors. Click on http://www.ambest.com/v.asp?v=rvs4916nc to view the entire program.
“In the ILS market today, assets under management for all collateralized products are about $75 billion as of June 30,” said Paul Schultz, chief executive officer, Aon Securities. “This amount is up about 10% from the previous period. Cash and capital continues to be invested in this sector and that 10% growth is pretty significant when compared to the overall growth of the reinsurance industry. However, when compared to prior years, collateralized capacity is significantly down, because then it was about 30% growth.”
Jean-Louis Monnier, global head of insurance-linked securities, Swiss Reinsurance Company, spotlighted what he believes is driving this growth.
“Driving the growth to collateralized reinsurance from catastrophe bonds is investors sourcing of the risks,” said Monnier. “Investors look upon ILS as being more attractive when compared to other asset classes, so the money is coming in.”
Schultz sees catastrophe bonds as still having some friction associated with them in terms of the documents and the timing of getting prepared to launch. “It is easier to go for what is simpler,” explained Schultz.
Visit http://www.ambest.tv/rvs16 for full coverage of the 2016 Rendez-Vous and watch exclusive interviews with key reinsurance executives. Interviews conducted thus far include: Robert DeRose, vice president, and Greg Reisner, assistant vice president, both of A.M. Best; Tim Yeates, managing director, Axco; Brad Adderley, partner, Appleby; and many others.
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