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The flight to quality in the insurance-linked securities (ILS) market has been well-documented, as some investors have opted to shift allegiance to ILS fund managers that are deemed higher quality, due to their longevity, track-records, or affiliations.
But now we can add to that a “flight to simplicity”, coined by RenaissanceRe CEO Kevin O’Donnell recently, specifically referring to the catastrophe bond market.
Together, quality and simplicity cover a lot of the bases that institutional investors are seeking within the ILS asset class at this time.
Institutional quality, quality of the portfolio of risks invested in, quality of track-record, quality of process, strategy, documentation, reporting, terms and conditions, people and partnerships, amongst other factors.