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Private ILS allow investors to harvest illiquidity premia: Ahmad, Schroders

For investors looking at insurance-linked securities (ILS), in order to gain the full diversifying benefits of an allocation to the asset class, it is important to look to the private ILS and collateralised reinsurance segment as well as catastrophe bonds, Zeba Ahmad, Alternatives Director at Schroders has said.

While catastrophe bonds provide a clear way to gain access to insurance and reinsurance linked returns in a well-structured and documented, largely liquid manner, the private ILS segment also comes with benefits, Ahmad explained in an article.

Catastrophe bonds tend to sit towards the upper-end of reinsurance towers, but with private ILS investors can gain access to returns from across more layers of the risk tower, matching their return requirements more closely to their appetites for risk.


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