The insurance-linked securities (ILS) market is gaining ground as a viable reinsurance alternative, helped by reduced risk premiums, increased confidence in models, lower transaction costs and still-growing investor interest, leading Gallagher Securities to say it anticipates continued growth of the sector.
The broker dealer and investment banking arm of reinsurance broker Gallagher Re said that insurance-linked securities (ILS), including catastrophe bonds, have now “evolved significantly since the early days of the market.”
“They have become increasingly mainstream both as a source of risk transfer capacity for sponsors and as a source of diversification for capital market investors,” Gallagher Securities explained.
The cat bond segment has been growing strongly, “supported by a growing and increasingly sophisticated investor base.”
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