Entering text into the input field will update the search result below

With 2017 Stress Test Passed, ILS Coming Of Age: S&P

Steve Evans profile picture
Steve Evans

With the major losses of 2017 largely behind the sector, the insurance-linked securities (ILS) market has tasked itself with becoming a trusted trading partner for ceding companies in their time of need, with the way the market recapitalised and traded forwards evidence that alternative capital continues to come of age, according to S&P.

In a recent report, ratings agency Standard & Poor's highlights the resilience of alternative reinsurance capital, explaining that the ILS asset class successfully passed the stress test of 2017's catastrophe losses.

Previously, the rating agency had warned that the hurricanes and major catastrophe losses of last year were likely to prove the first true stress test of alternative capital, ILS market structures and ILS funds.

In particular, the rating agency expected that major events hitting the ILS market's ground-zero of Florida, such as hurricane Irma, would provide a valuable stress test of the staying power of third-party reinsurance capital and investor appetite to remain invested in ILS products.

That stress test now appears to have been passed with flying colours, as the ILS fund market entered 2018 with even more capital available to it than it had at 2017 renewals.

The pace of catastrophe bond issuance so far in 2018 has also set records, providing further evidence of the ongoing advance of the capital markets into reinsurance, the resilience of the structures and investor base, as well as the appetite to continue trading in catastrophe risks. The rapid rate of issuance has continued in the second quarter.

With alternative capital in reinsurance now seen to have reached new highs, with $94 billion of ILS fund capacity now detailed in our directory of ILS fund managers, Aon reporting that it counts alternative reinsurance capacity as now amounting to $89 billion at the end of 2017 and cited 10% growth in the

This article was written by

Steve Evans profile picture
Owner of www.Artemis.bm the leading website on catastrophe bonds, insurance linked securities, reinsurance linked investments, reinsurance capital trends & risk transfer.Tracking the catastrophe bond market and the development of insurance-linked securities and collateralized reinsurance since 1996, as well as global insurance and reinsurance market trends.Built insurance technology (insurtech) solutions since the mid-90's, including trading platforms, derivatives platforms, claims prediction engines, intelligent agents.As well as Artemis, I am also the owner of www.reinsurancene.ws, a free to access reinsurance market publication with the largest readership of its kind.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.