September 2014 46 Bermuda:Re/insurance+ILS
In pursuit of innovation Bermuda:ILS
The convergence market is encouraging some creative thinking in the market. Here, we explore some of the key innovations and their implications for the ILS sector.
T
he convergence market continues to act as a driver of innovation within the wider re/insurance market, with the influx of pension fund capital and a fiercely competitive dynamic helping to encourage creative
thinking. A number of developments have been pursued by the market to further enhance its potential, while existing capabilities have been tweaked and refined.
Triggers
Although there has been increased interest in indemnity trigger transactions, which now account for the majority of cat bond deals— spurred on by investors increasingly happy to consider indemnity transactions and by cedants keen to do away with basis risk associated with index and parametric-linked triggers—innovations are nevertheless apparent among trigger types.
EVERETT COLLECTION /
SHUTTERSTOCK.COM
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