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

The Potential Of Insurance Linked Securities In The Belt And Road Initiative

Feb. 01, 2019 12:58 PM ET6 Comments
Kirill Savrassov profile picture
Kirill Savrassov


  • BRI is not a China-only story.
  • BRI is the only initiative that fills the ‘infrastructure gap’ necessary to spur economic growth and inclusivity on a truly global scale. It already involve 68 countries on 3 continents.
  • Initiative already comprise $2 trillion worth of projects.
  • At least 3 of key transport corridors passing trough one of the most earthquake-exposed areas of Eurasia, if not globally.
  • At the mean time, insurance penetration within transit countries are fractions of 1-2%.

Base on the original interview which first appeared in Asia Insurance Review's February Issue, which can be viewed here.

China’s belt and road initiative (BRI) is probably one of the largest infrastructural development projects in modern human history. So, due to its size and geographical diversity, BRI related projects definitely face numerous challenges and risks, both for the project’s initiator and other participants.

Current estimates for turning this project into a reality vary from $900 bn to several trillion (a figure of 2 trillion referred more and more often), with most of the financial burden and the work being taken on by state-owned enterprises.

Opportunities and challenges for ILS

As there are massive infrastructure investments in both China and many more nations including its neighboring countries, the re- insurance industry, and insurance-linked securities (ILS) community will have its own multi-task opportunities and challenges with regards to the BRI related projects.

ILS, being a natural catastrophe protector for critical infrastructure with an effective track record on that in other parts of the world, it is not isolated from such a challenge or opportunity.

Having matured for peak protection for large catastrophe exposures (including infrastructure) in the US, Caribbean, Latin America and Africa, the ILS industry has a major opportunity in the Chinese market. The development and use of ILS solutions for BRI’s sub-projects can ‘rocket boost’ the entire alternative risk transfer area for Asia in general.

ILS can bring in significant stability into investments of BRI

In the case of BRI there is an added benefit of a good time scale and effective results can come to reality much faster than it took for the United States to achieve current level of ILS use. Especially with new domiciles like Singapore and Hong Kong consciously developing the required framework for those activities and

This article was written by

Kirill Savrassov profile picture
Seasoned (re-) insurance industry professional & company executive with extensive connections in Central, Eastern, Southern Europe, London, Bermuda & the United States at both corporate and government pillars.Proven track record for deal making and strategic leadership. Implementation of mid and long-term projects at all stages with capability and strong motivation to achieve results. Effective interfacing of Western and Eastern European commercial cultures. Ability and track record of working with complicated situations.Speaker at international events with particular speciality to Catastrophic Bonds, Insurance-Linked Securities and Alternative risk transfer.Occasional visiting lecturer to various institutions on the topic of Disaster Risk Transfer including London School of Economics & Political Science (LSE) and Central European University. Strategic management course lecturer for Chinese magistrate students of BSU’s School of Business.Particular interests comprise: ILS, Sovereign Disaster Risk Transfer, ECIS insurance market development, Parametric solutions in catastrophe reinsurance and Risk transfer to private capital markets, Chinese Belt & Road Initiative and its critical infrastructure protection solutions.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (6)

World Class article.Thanks for your input.
fussyGroup profile picture
thank you!
Kirill Savrassov profile picture
@fussyGroup For technical U/R stuff: www.phoenix-re.co.uk/...
Kirill Savrassov profile picture
@fussyGroup Also for asset class description and insights: www.phoenix-re.co.uk/...
Kirill Savrassov profile picture
@fussyGroup Thanks for your extended comment. To learn more on topic welcome to www.phoenix-re.co.uk/...
fussyGroup profile picture
Intriguing article, and a space that I want to gamble is worthwhile. My expectations were not met; however, to be fair, my expectations were not reasonable even if I did not realize so until after reading the entire article.

I wanted more specifics than just this as a think piece. I am grateful for @Kirill Savrassov having posted this article even if my comment seems only to be demanding more than was intended to be offered here.

In particular, more content with links about catastrophic risks insurance with a view into exposure and opportunity in China is what I had hoped to find. I have seen some wild looking prospectus about Chinese insurers and that topic is by itself probably too big and complicated to get a free article, then, to go for the thin air around securities for risks that are insured is not really what I had a right to stumble upon at Seeking Alpha, so where in the world of insurance risk literature would links be pointing me?

Moreover, in the insurance securitization of catastrophic risks, I was hoping to be gifted your know how about which, if any, publicly traded companies have a presence with business likely to be generated in Central Asia and of Eastern China for the Belt and Road Initiative (BRI) to create the infrastructure that ought to have the coverage. Let me at least admit that I was greedy hoping to find it, and, maybe my asking for more will promote follow on articles or links from others who comment? My interests are global and yet quite small. The BRI is producing many targets for my investment choices and this article offered a way into how I would like to participate.

So the timeline is that if the coverage and the securitization come, we can invest or is this an investment only for large insurance pools?

Why not name any publicly traded companies that would be likely underwriters?

Why not name any publicly traded companies that would be likely re-insurers?

Why not name any publicly traded companies that would be likely insurance as well as securitization brokers?

If I can point to the canvas without adding much painting to the effort, let me ask about the basics of publicly traded opportunities among the underwriters, there-insurers, the shared coverage stakeholders, the bankers, the brokers for the coverage, the brokers for the securitization, and the suretyship stakeholders. Sadly, for you as an author, my investments are generally where nobody else can defend having taken a position. I do not expect a large audience to share my interests.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
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.