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Reinsurers are much better placed to absorb cat losses; insurers are carrying more risk. -
Top layer competition is an added pressure on ILS firms, but the impact can be overstated.
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Various trends may work together to hold the cat markets up for longer than some had feared.
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Pockets of new capital will not shift pricing at mid-year.
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The depth of the retro market recovery will be an influential factor in the pace of the cat market slowdown from here.
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Cat bonds and sidecars are well positioned for growth, while private ILS will benefit from further innovations to improve liquidity.
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Competition for remote risk deals intensified as more capital has targeted the swathe of business that has historically been the heartland of ILS.
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The cost of maintaining a team to service institutional investors does not always weigh favourably versus bringing in ILS capital.
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Prior-year cat loss years that are finally shaking out drove fee benefits in Q3.
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Fermat’s John Seo said the industry can “see the wall of money coming in, but it’s coming in slowly”.
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A number of players suggested that the cost components of first-party claims were up between 30%-50% on that seen during Ransomware Wave One.
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A challenge facing the industry in the years to come is the question of how can it move through a rotation of its investor base to capture the growth opportunities that have arisen.
