Insurance and ILS will remain attractive to investors in H1 2019: Twelve Capital

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The insurance sector will remain attractive to investors in the first half of 2019, and there are “clear signs of momentum” in how natural catastrophe risk is priced in the equity and ILS markets in the wake of two recent heavy loss years, according to insurance investment manager Twelve Capital.

In Twelve Capital’s H1 2019 outlook, the company suggested that capital markets are increasingly willing to invest in a wider scope of insurance risk.

ILS market ready for next phase of growth, say ILS NYC 2019 speakers

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The insurance-linked securities (ILS) market is ready and expecting to enter further phases of growth and expansion, according to the discussions between speakers and also attendees at Artemis’ third conference in New York, ILS NYC 2019.

The event held on February 1st 2019 saw 350 registered attendees assemble in the heart of Manhattan for the third annual Artemis NYC conference.

Cat bond attraction as investment & risk transfer to persist, perhaps intensify

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Catastrophe bonds are likely to remain a very attractive option for alternative investing and also as a risk transfer tool, perhaps becoming more so in the wake of the last two years of losses and the resulting market shake-out.

Catastrophe bonds have not gone away, despite becoming the smaller component of the overall ILS and alternative reinsurance capital market when compared to collateralized forms of reinsurance and retrocession.

But their attractiveness has never diminished either, as an investable asset or as a risk transfer tool. In fact it persists and we believe could even intensify.

ILS funds favour preferred & best performing cedants at renewals

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Strong investor inflows in 2017 and 2018 helped the insurance-linked securities (ILS) fund market more than compensate for its losses, driving continued growth in the size of the sector, according to Eurekahedge.

However a slowdown in inflows was noted over the last year, as investor inflow allocations amounted to $9.4 billion in 2018, trailing the roughly $16 billion of inflows recorded in 2017.

But in both years these figures outstripped the performance-based losses suffered by ILS funds, which amounted to $2.1 billion in 2018 and around $7 billion in 2017, according to hedge fund data and analysis provider Eurekahedge.