A.M.BestTV: The Rendez-Vous Conference: Insurance-Linked Securities Must Address New Risks or Face Slower Growth, Executives Say

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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.

Recent episodes of ^A.M.BestTV include:

• The Rendez-Vous Conference: Brexit Has Insurers Exploring New Relationships, Changes to Operations: At Rendez-Vous, insurance executives spoke about the United Kingdom’s withdrawal from the European Union, which is setting off a host of potential changes within the London insurance market: http://www.ambest.com/v.asp?v=rvs3916nc.


• The Rendez-Vous Conference: Insurance Disruption Takes Many Forms; Fewer Aim for Core Risk: At Rendez-Vous, insurance leaders said that they hope to harness or head off market disruptors by remaking distribution and business processes or by finding new ways to share risk: http://www.ambest.com/v.asp?v=rvs2916nc.


• The Rendez-Vous Conference: Reinsurers Say Relevancy is Key to Expanding the Ranks of Insureds and Risks: At Rendez-Vous, reinsurance executives said their challenge is to convince insurers and the public that their products and services are affordable, valued and effective in guarding against a growing range of global risks: http://www.ambest.com/v.asp?v=rvs1916nc.


• Global Reinsurers Focus on Innovation to Maintain Relevance: Vice President Robert DeRose and Assistant Vice President Greg Reisner address the state of the global reinsurance market: http://www.ambest.com/v.asp?v=globalre916.

^A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View ^A.M.BestTV episodes at http://www.ambest.tv .

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.