Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Collateral news

News related to the use of collateral for and in insurance-linked securities (ILS), catastrophe bonds and collateralized reinsurance arrangements.

Collateral for insurance-linked securities (ILS) comes in numerous forms, but by far the most common is for ILS deals, especially so for all catastrophe bonds, to be fully-collateralized by cash, with that cash held in trust and invested into secure, liquid assets such as US government treasury money market funds. The use of letters-of-credit (LOCs) is also seen, but far less widely in ILS.