Luca Tres and Paul Whiting discuss the redefining of the life insurance capital management landscape.
Someone could think of ILS funds purely as risk-taker investors, waiting for intermediaries to bring them pre-packed transactions. This is clearly not the case anymore. Life ILS players have the technical knowledge and a unique mix of capital markets and actuarial skills that make them a ‘solution provider’ for life insurers; a partner able to structure tailormade capital management solutions that address life insurers’ specific needs. Risk margin relief and capital fungibility/transferability are just some examples of the areas of mutual interest. Private solutions can be offered at smaller scale and lower cost than public security offerings, putting ILS solutions within reach of a wider range of insurance companies.
Published | The Actuary, November 2016