As the ILS market continues to develop, the litmus test of its future potential could be the range of new issuers that are tempted to use this form of risk transfer bringing new risks to the sector.
It has been another manic month within the ILS space with yet more reinsurers ensuring they have the tools necessary to participate in this rapidly growing market but, perhaps more significantly, a number of new issuers using these markets to offset their risks for the first time.
One of the big points of debate in recent years has been whether the market can continue to diversify bringing new risks, new issuers and new structures to the sector in a way that will allow the market to continue to grow.
Some of the deals in recent months would certainly suggest that this is already happening. Some of the new issuers have brought firsts to the market in terms of risks, while yet more reinsurers are positioning themselves to operate within this space.
Perhaps the most innovative bond to have been launched in recent months was by first time issuer First Mutual Transportation Assurance Company, a New York State-licensed and domiciled captive insurance company and subsidiary of the Metropolitan Transportation Authority (MTA).
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ILS, MetroCat Re, New Jersey Manufacturers Insurance Group, AXIS Capital Holdings, Group CFO