Securitization - new opportunities for insurers and investors

12 December 2006, Zurich

Insurance linked securities (ILS) provide insurers with a financing vehicle and a means of transferring risks to the capital market. They increase industry capacity, improve insurers’ return on equity, and reduce the volatility of earnings. For fixed-income investors, ILS provide an attractive rate of return that is not correlated with the rest of their portfolio. Structuring costs for such securities are coming down as the market grows rapidly.