Insurance-linked securities, (Re)set & ready – ILS NYC 2022

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Last Friday we welcomed more than 200 attendees to our fifth insurance-linked securities (ILS) conference held in New York City and our first in-person event since the pandemic.

It was a pleasure to welcome attendees back to the first Artemis event in more than two-years and the success of the day underscored the important role of conferences in bringing the insurance-linked securities (ILS) market together, as well as the need for thoughtful discussion on issues of note for the market.

The feeling in the event was incredible, with the industry clearly delighted to be meeting face to face again and this being the first in-person conference since the outbreak of the pandemic for many of the attendees.

We had originally planned the event for February and so moved to a smaller venue for ILS NYC 2022, but due to a postponement to April after the Omicron wave erupted, it turns out we could have sold the venue twice.

But for those who ended up on what became a very long waiting-list, I’m pleased to say we have recorded the event and will have video and audio available in a few weeks.

Our theme for ILS NYC 2022 was (Re)setting the scene, appropriate given the pandemic-enforced hiatus in industry events and the market met to discuss the future of insurance-linked securities (ILS), as the COVID-19 pandemic abates and the industry adjusts after another year of catastrophe losses.

Our four main panels saw extremely thoughtful discussions and excellent moderation, giving the attendees plenty to speak with industry contacts about during the networking coffee breaks, long lunch and cocktail reception.

Predictability:

Our first panel saw session leader Ben Fox, Principal and Portfolio Manager at Hiscox ILS, tasked with leading a discussion on the importance of reducing surprises, delivering transparency and keeping investors and counterparties informed in the ILS space.

Joining him were: Matthew Ball, Senior Director, WTW; Cory Anger, Managing Director, GC Securities; and Matthew Berdoff, Head of IR & Fundraising, Hudson Structured Capital Management.

Fox and his panellists had a wide-ranging discussion on some of the challenges the ILS market is dealing with at the moment, with a particular focus on how to respond to investor feedback and their desire to gain increasing confidence that the ILS market understands the risk it is underwriting and investing in.

Fox summed up his session to say that, “It sounds like there’s still lot’s of work to do, but some causes for optimism at the same time.”

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Accessibility:

Our second panel featured a discussion led by Judy Klugman, Head of ILS Sales at Swiss Re, who expertly helped panellists explore the need to keep coverage options open and available to all, while identifying reasons for optimism for growth as well.

Joining her were: David Flitman, CEO, Safepoint Insurance; Chris Caponigro, Global Head, AXIS ILS; and Philipp Kusche, Global Head ILS & Capital Solutions, TigerRisk Capital Markets & Advisory.

The panel discussed the way different ILS products respond and Caponigro highlighted the need for ILS products and structures to be “repeatable, scalable and truly economic for both the investor and the sponsor.”

Klugman commented, “To create that scalability and the volume, to really tap into the promise of a broad institutional investor marketplace, there has to be a way to do that so you don’t have the surprises. Investors understand that losses are part of the trade. If there were never losses, then you guys (sponsors) wouldn’t buy the protection. You have to have losses, but what is challenging is if there are surprises, that if the product that you invested in did not perform as you thought it should react, that is wherein lies the problem.”

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Differentiated:

The third session saw a panel led by Stephan Ruoff, Head of ILS at Schroders Capital, guiding experts thoughts as to why the ILS market needs to become increasingly differentiated, in order to offer investors choice and ensure it can meet the varied needs of ceding companies.

Ruoff was joined by: Brittany Baker, Director – Technical Sales in Growth, CyberCube; Rob Hauff, Portfolio Manager, Vesttoo; and James Lee, Managing Director, Aspen Capital Markets.

This group discussed entry into new categories of risk and the challenges of longer-tailed ILS products, as well as the opportunity presented by the cyber marketplace.

“If I look at the ILS space, the availability of non-cat risk is already there,” Ruoff said, highlighting areas of specialism such as life ILS, as well as new vehicles that are specialty, casualty and run-off focused. “So I would argue we’re already seeing a differentiated offering.”

The panel discussed the fact non-catastrophe ILS products aren’t always as uncorrelated as a natural catastrophe exposed ILS investment portfolio and in fact can be quite correlated instead.

Ruoff stated, “I think if investors understand that it’s not decorrelated, but it’s a risk they’re taking and it’s rewarded in the right way, then I don’t think that it’s an issue,” going on to stress that education of investors will be absolutely key for ILS market expansion into these new risks.

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Responsible:

The fourth of our main sessions saw Tom Johansmeyer, Head of PCS at Verisk Insurance Solutions, assessing what climate and ESG really mean in the context of the insurance-linked securities (ILS) market and asking how well the industry is doing on these critical issues so far.

Joining Johansmeyer were: Lorenzo Volpi, Managing Partner, Leadenhall Capital Partners LLP; Tanya Watters, Vice President, ILS, Neuberger Berman; and Craig Hupper, SVP & MD, Environmental, Social and Governance, TransRe.

This was a wide-ranging debate on the role of environmental, social and governance (ESG) within ILS and the importance for asset managers to embrace it, as well as how climate change is becoming a topic that increasingly drives investor questions.

Johansmeyer highlighted the need for the ILS market to lead on issues related to sustainability, climate and ESG, having the ability to effect significant “positive change” with its capital, if deployed in the right manner.

Volpi commented, “Investors don’t want to just hear about how your going to do this for your portfolio, investors also want to hear about you as a company and whether you really marry this vision with your actions.”

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Final expert panel:

At the end of the day, I welcomed our session leaders back on stage to reflect on the discussions they had and to identify some reasons for optimism for the ILS market’s future.

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A big thank you to all our speakers and to our valued attendees for positively engaging with the panellists and for their support of the event. We hope you enjoyed the day!

I’d like to personally thank all of our kind sponsors of the ILS NYC 2022 conference for their support:

For all enquiries regarding sponsorship opportunities please contact [email protected]

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