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A flight to quality is underway in the insurance-linked securities (ILS) market, following disappointing performance in 2017 and 2018 according to a new survey by Intelligent Insurer’s sister publication Bermuda:Re+ILS.
Only 9 percent of respondents said there was no flight to quality among investors, compared to 55 percent who saw evidence of one, leaving a significant number of people undecided on the matter.
One respondent suggested the flight to quality would prove a permanent feature.
“Institutional investors crave yield in a zero interest rate (or near) policy environment, especially when it is a diversifier. That appetite will finally drive insurers, or more likely their successor institutions in the food chain, to learn to quantify a far wider range of low beta risks in the economy,” said the respondent.
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