Alternative reinsurance capital & ILS fueling innovation
Thursday, 02 25 2016, Category: Insurance and Reinsurance, Country: World
While evident that the wealth of alternative reinsurance capital has contributed to the decline in rates in the property catastrophe re/insurance industry, its presence and influence has also fuelled innovation as insurers take a more aggressive stance, according to Marsh.
Rate declines across the majority of business lines in the U.S. P&C sector persisted at the key January 2016 renewals, with the challenges of last year continuing into 2016 and showing little or no signs of change.
The entry of alternative reinsurance capital, in the forms of catastrophe bonds, ILW’s, insurance-linked securities (ILS), collateralized reinsurance, and reinsurance sidecar ventures, among others, has slowed somewhat from the levels seen at the beginning of last year, yet continues to hinder any potential positive rate movement.