Swiss Re Insurance-Linked Fund Management

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New ILS funds will be impressive in size: Adderley, Appleby

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As insurance and reinsurance linked investing remains popular among investors and an attractive source of protection to cedents, new insurance-linked securities (ILS) funds are still being formed and we should expect them to be “impressive in size”, Brad Adderley a Partner at law firm Appleby Bermuda said recently.

brad-adderley-ils-nyc-2020Speaking to A.M. Best TV at our recent New York insurance-linked securities (ILS) market conference, ILS NYC 2020, Adderley explained that from his vantage point as a leading legal advisor to the ILS market, he sees a still buoyant marketplace.

Discussing ILS market activity levels he said, “I think we’ll continue to see an increase.

“I know there will be new ILS funds formed and I know those ILS funds are not coming in small sizes.”

Further explaining, “I think they will be impressive in size when they come to the market.”

Adderley also noted that while activity may still be buoyant in the ILS market, the sector and reinsurance as a whole continues to deal with the fall-out of recent catastrophe loss years.

“I think you’re going to see a flight to quality.

“I think the major players who have great reputations are going to raise more capital, but I wonder if some of the smaller players are going to struggle to get over the billion dollar mark,” Adderley said.

He stated that recent levels of catastrophe bond issuance are likely to continue, adding that in the near future, “We’re probably going to see at least two new ILS funds formed and there will be a continuation of cat bonds getting done.”

On the other side of the ILS market, where collateralised reinsurance and private transactions are entered into, Adderley also forecasts a market recovering from its losses and returning to a more healthy equilibrium.

“I think what you’re seeing is a collateralised market continuing to get back to be more active,” he said.

Adding that he forecasts the ILS market overall will be, “hopefully growing again,” while as the year 2020 progresses “the issue of trapped collateral diminishes.”

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

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