ORIGINAL PUBLICATION HERE
The storms of 2017 proved wrong the cynics who had doubted the resilience of insurance-linked securities (ILS). Investors did not flee at the frst sight of a loss. Instead, and to the contrary, since the hurricanes, investment has not merely been replenished but has increased substantially. ILS has shown it can support insurers and reinsurers through crises. ILS, conceived after Hurricane Andrew in 1992 and developed after Hurricane Katrina in 2005, has come of age.
That said, ILS will and must continue to develop. The additional funds that have been received for investment must be invested and the historic concentration of funds in Gulf of Mexico risks cannot be sustained. Investors need more diversity of risk.