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ILW customisability key to fund positioning, but demand declines slightly: CNR CEO

The ability to customise industry-loss warranties (ILW’s) is seen as a key trait in the reinsurance-linked asset that assists in the portfolio construction process, but demand for ILW protection has fallen slightly among reinsurers, according to the CEO of the City National Rochdale Select Strategies Fund.

The slight decline in demand for industry-loss warranty (ILW) protection is likely a response to the much higher cost of coverage in the hardened reinsurance market.

Artemis’ index of ILW pricing shows how significant the price increase in ILW’s has been over recent years and despite having declined somewhat and plateaued since this year, the higher cost of retrocessional reinsurance capital has seen some buyers pulling-back somewhat from the ILW market.


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