More smaller cedants are looking to use insurance-linked securities (ILS) or other alternative structures to transfer risk. Adam Szakmary, portfolio manager, Blue Capital Management, talks to Intelligent ILS about what is driving this trend.
The number of smaller cedants using alternative risk transfer structures, including insurance-linked securities (ILS), has been growing in recent years. These players are entering the market privately and publicly, largely driven by a desire to diversify and use what can be cost-efficient alternatives.
While the ILS market was originally limited to covering primarily peak perils in the US, Europe and Japan, a growing number of deals are being structured that deal with the risks in other geographies such as the US Mid-West, Turkey and Italy. A broader range of risks and structures is also being covered.
Adam Szakmary, portfolio manager, Blue Capital Management, whose company provides access to a differentiated book of small, geographically discrete cedants in its core investor product offerings, says that activity is increasing for cedants that are sub-$250 million in risk capital.
Blue Capital, ILS, cat bonds, sidecars