US RISKS AND PROPERTY CATASTROPHE BUSINESS DOMINATE ILS MARKET, BMA REPORTS

The insurance-linked securities and alternative capital markets are currently dominated by US risks and property catastrophe deals, according to a report by the Bermuda Monetary Authority. Using re/insurers’ alternative capital schedules and statutory financial returns, the BMA found that at the end of 2017 US risks accounted for 40% of the market’s $51.9bn of total exposure and 65% of the market’s $3.9bn of gross written premiums. Bermudian re/insurers accounted for 58% of the market’s capacity, while property catastrophe and retrocessional business accounted for 94% of total exposure. Collateralised reinsurance accounted for 55% of the market’s exposure, cat bonds 36% and sidecars 6%.