Welcome to the second Artemis Monte Carlo Reinsurance Rendezvous Roundtable, in which participants discussed the potential impacts of recent catastrophe events on the insurance-linked securities (ILS) sector’s investor base, and the broader marketplace, as well as emerging trends and challenges as the January renewal season fast approaches.
Following the devastating impacts of hurricanes Harvey and Irma, roundtable participants discussed whether the active 2017 Atlantic hurricane season would be the first real test for the ILS space, highlighting how important the coming months would likely be for both sponsors and investors across the industry.
Recent catastrophe events have again brought the lack of insurance penetration in both developed and emerging parts of the world into focus, and ILS industry experts explored the potential for the asset class to expand its remit, providing both protection and revenue, with an added humanitarian element.
The bundling of risks and potential challenges this creates was also discussed during the debate, as was the need to reverse some of the loosening of terms and conditions that has been evident throughout the softened market phase.
As one of the most rapidly advancing and changing exposures in the risk transfer space, cyber was highlighted as a possible avenue for ILS expansion, but roundtable participants were eager to underline the inherent complexities and challenges surrounding cyber risk.
Looking forward to the key January 2018 renewal season, participants shared some thoughts on whether recent catastrophe events in the U.S. would have a meaningful impact here, stressing the need for investors to understand inherent uncertainties with catastrophe risk investments.
Throughout 2017 the ILS market has continued to grow, with both investors and sponsors showing maturity and sophistication during a testing insurance and reinsurance industry landscape.
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