Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

UK ILS market launch a key 2017 deliverable for LMG


Launching an insurance-linked securities (ILS) market in the UK is a key deliverable over the next six months for the London Market Group (LMG), as the anticipated publication of ILS legislation and its enactment is seen as a critical piece of the London insurance and reinsurance market’s modernisation.

The UK government is targeting early 2017 for the launch of the legislation required to start seeing insurance-linked securities (ILS), collateralised reinsurance and perhaps catastrophe bond issuance in the London market, while the UK becomes an ILS domicile.

Hurdles remain to encourage the market that the UK’s ability to house ILS transactions will be as efficient as other established ILS domiciles, with both speed to market and taxation seen as the most important hurdles the legislation needs to overcome.

But for the LMG it is clear that ILS business is among its main priorities, as a newly published manifesto for the future names ILS as one of “a series of concrete actions that will move the market forward.”

Nicolas Aubert, Chairman of the LMG, explained “The need for London to speak with a single voice and take definitive action on a number of critical issues is becoming increasingly important – a fact highlighted by the UK’s decision to leave the EU.

“I am delighted to say the LMG has made great progress across our four workstreams in the last year, progress driven by the unprecedented levels of market support around different projects. In terms of growth, the government’s recent letter on the new ILS legislation is tremendously positive in helping to create a whole new market here in London.

“This new world is challenging, but it also offers opportunities to make some very positive changes that will allow our unique marketplace to grow and thrive. We have a window of opportunity to make some substantial strides to increase our competitiveness, we need to seize the moment and move forward with increased enthusiasm.”

One of the LMG’s key deliverables for the period October 2016 to March 2017 is given as; “Proposed ILS legislation is published and LMG develops plans for ILS market launch in the UK.”

That suggests that the actual launch of an ILS market in the UK will not be until after March, which seems reasonable as the final legislation may not be fully enacted until early 2017 anyway.

Read some of our other recent coverage of London’s journey to become an ILS hub:

UK Gov targets London ILS framework for early 2017.

UK ILS legislation can help London market support resilience: LMG CEO.

ILS business could transact in London from January 2017 – LMG’s Newman.

Efficient ILS structure will help secure London’s future: Beale, Lloyd’s.

LMG welcomes start of UK gov’s ILS legislative process.

UK drafts beginnings of ILS framework, starts with transformers.

London LMG looks to innovate on equal reinsurance credit for ILS.

Attracting ILS & cat bonds will be challenging for London: Report.

London re/insurance market needs true innovation: DAC Beachcroft.

Collateralised reinsurance focus for London (LMG) ILS task force.

London has to fight its corner on ILS: Michael Wade, Cabinet Office.

London ILS task force participants revealed, holds first meeting.

LMG sets up London cat bond & ILS group, a chance to think bigger.

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

Artemis ILS NYC 2023 - Insurance-linked securities conference in New York City

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