A game of dislocation and transformation


A game of dislocation and transformation

As ILS continue to grow as an asset class, Kathleen Faries, CEO, and Susan Lane, senior vice president, head of business development and client services at Tokio Solution Management, explain how this form of risk transfer is changing the market.

Amid a backdrop of low interest rates, dismal returns from the majority of the financial markets and relatively benign catastrophe losses, the capital markets have embraced reinsurance as a compelling alternative asset class.

The influx of capital from institutional investors, family offices, sovereign wealth funds, asset managers and others has increased significantly in recent years and has clearly made its mark on the relatively small $350 billion market called reinsurance—a primarily intermediary-driven market that has been conducting its business for decades based on relationships and a commitment to pay through good years and bad.

Year after year, capital markets investors continue to be drawn to the reinsurance industry. Moreover, the capital markets’ investment and commitment to the industry is being viewed as more permanent and is being relied upon not just as an efficient source of capacity, but as a substitute for equity capital.

ILS, Tokio Solution Management, cat bond, alternative capital, Bermuda

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