Reinsurers who previously bought Industry Loss Warranties (ILWs) have decided to be sellers of the instrument in anticipation of a potential increase in demand for alternative covers from insurers and other reinsurers.
This is the opinion of Stefano Nicolini, senior vice president of brokers BMS, who says that reinsurers have begun to respond to insurer’s interest in the non-traditional markets.
“Because some insurers are buying less cover from the traditional reinsurance markets, reinsurers have found that they have enough capacity to become sellers of ILWs, rather than buyers,” he says.