Why the development of a secondary market will transform ILS

There are many things investors look for when deciding where they should allocate capital. First, they need to believe they will be paid a fair return for the risk involved. They value investments that offer diversification—assets that are not correlated with other things in their portfolios. And they tend to prefer investing in things that are liquid: it is easier to justify investing in something when it is also easy to sell it, should you suddenly need the money for something else.