Lack of predictive modelling a factor limiting ILS casualty growth
Wednesday, 11 18 2015, Category: Insurance and Reinsurance, Country: World
A catalyst for the growth of insurance-linked securities (ILS) in the property catastrophe reinsurance sector is the capabilities of third-party modelling, but a lack of predictive modelling within the casualty arena mitigates entry and impact of a similar scale, according to industry experts.
The entry of alternative capital in the global reinsurance market has largely focused on well-modelled, existing product lines, most notably property catastrophe risks, serving to drive down rates and drive up competition at a time when investment returns are low and losses are benign.
On the back of this, insurance, reinsurance and ILS market commentary has, in recent times, discussed the potential drivers and limitations to the wealth of alternative reinsurance capital accessing casualty risks.