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For the insurance-linked securities (ILS) market 2015 was the year the market matured, according to Paul Schultz, chief executive officer at Aon Securities.
“I would characterise 2015 as a transitional year,” Schultz told Intelligent ILS. “The volume [of transactions] was of an acceptable level, with a few deals in the fourth quarter of the year that solidified the result, and it feels that, to some degree, we’re now in a period where the markets are at something of a plateau; in a period of transition where investors are looking at the returns that are available and looking at the future growth opportunities, with a little bit of repricing happening in the marketplace.
“So, I would just characterise 2015 as being very different from 2014, which was all about growth. 2015 has been more about the transition of the model – from simply pricing market share of growth to rationalising where the acceptable risk/return levels are in the marketplace and looking at what the associated pricing levels could be.”
Schultz said that he thinks that the market has definitely matured – it’s much more sophisticated in terms of understanding where there are opportunities to deploy capital and a much bigger understanding of structures that are a bit more complex than earlier ones. The market has moved much towards an indemnity market, with different risks coming into the market place.
ILS, 2015, 2016