In his first ILS blog, Clive O’Connell a partner at Goldberg Segalla talks about the evolution of investment funds.
ILS is not a fad or a fashion. It is here to stay and is becoming an integral part of the capital financing of insurance and reinsurance companies.
Whereas, originally, ILS products were often large complex cat bonds financed by subscription through offerings put out by major investment banks, future ILS products will be simpler and more easily put in place.
Investors dipped their toes in the water of ILS in the aftermath of Katrina and the world economic crisis, when natural catastrophe premium rates were high and other investment opportunities low. Now that rates are lower and other investment opportunities present themselves, they have not fled. Instead they are approaching the area of investment opportunity in a more considered and strategic manner.
ILS, Goldberg Segalla, blog