I just found a great article that I wanted to share with you all; consider it some reading for the weekend.
Towers Perrin have a quarterly publication titled Emphasis and in the 3rd edition of 2008 (just released) they have a great article titled ‘All-Weather Insurance Securitization‘. The article discusses how insurance linked securities and catastrophe bonds are no longer just instruments cedents run to straight after a major catastrophe (although the ‘cat effect’ still happens) rather they are becoming seen as an integral part of a diversified risk management plan. This combined with the investment appeal should ensure ILS is here to stay.
Well worth a read, as are the other articles in Emphasis (a quarterly publication of insurance and risk management trends).