Opinion

Lloyd's syndicates are hugely reliant on reinsurance and retrocession to manage their catastrophe exposures – so the Corporation's plans to help make it easier for players to source ILS capacity couldn't come soon enough.

In the midst of reinsurance conference season you might expect there to be a tendency towards group-think.

Cracking into a crème brûlée will always make me think, in passing, of (re)insurance.

At Munich Re's ILS roundtable in Monte Carlo, one of the speakers raised the concept of whether a "flight to quality" amongst ILS investors might be better labelled a "flight to alignment".

Every year, returning from the Monte Carlo Rendez-Vous is like emerging from a chrysalis – a draining process of freeing oneself from a tiny hive of frantic activity.

Rewind a few years and “hot money” was one of the pejorative labels thrown at a burgeoning ILS sector.

There’s no doubt that the stress of a serious hit from Hurricane Dorian to Florida reinsurers will add age lines to the ILS market.

The reinsurance and ILS markets have spent two years talking about losses, but perhaps more focus on the good years would help reduce some of the noise in the bad years.

Do we need new labels for the different types of ILS managers that exist?

As ILS reinsurers recover from the 2017-2018 loss years, the consensus view now is that the market will see a “flight to quality” by investors, bolstering the position of some platforms while eroding the asset base of poorer performers.

Reinsurers are taking modest rate increases largely by “riding on the backs of primary writers”, Chubb CEO Evan Greenberg said recently.

On sweltering weeks like this, you can see why climate change has become a talking point that every ILS manager has to cover in their pitch for new investor mandates.