Alternative reinsurance capital to have profound effect
Thursday, 09 10 2015, Category: Insurance and Reinsurance, Country: World
The entry of alternative capital into the reinsurance market and the growth of ILS is not just expected to continue to disrupt the traditional market, it is expected to have a “profound and lasting effect” according to Fitch Ratings.
The growth of alternative capital and the increasing use of insurance-linked securities (ILS) instruments such as catastrophe bonds and reinsurance sidecars, alongside the growing acceptance of insurance and catastrophe risks as an asset class, has all resulted in a reshaping of the reinsurance landscape.
The first effect has been the pressure on reinsurance rates in certain specific areas of the market such as U.S. property catastrophe risks.