Legacy sector role in casualty ILS highlighted in Monte Carlo by PwC’s Britten

The casualty insurance-linked securities (ILS) market has been growing and PwC highlighted this at events in Monte Carlo at the Rendez-Vous this week, saying that it is an area for the legacy reinsurance and ILS sectors to collaborate.

Matt Britten, Partner, Insurance at PwC Bermuda explained that the RVS event is a critical time for meeting with clients and sharing thought-leadership on areas of opportunity.

“As we navigate an era marked by increasing climate-related risks and a heightened focus on digital transformation, it’s clear that innovation and resilience are more critical than ever.

“The discussions in Monte Carlo around harnessing advanced analytics and artificial intelligence to better predict and mitigate emerging risks have been particularly insightful, and further reinforce Bermuda’s pivotal role as a hub for addressing these global challenges and driving the future of reinsurance,” Britten explained.

Further commenting on the legacy insurance and reinsurance space, Britten highlighted the fact this market’s services are becoming important to ILS specialists.

Britten said, “During the year we have seen a couple of legacy deals executed with ILS players providing a solution to trapped capital.

“At the same time the Bermuda market has also seen an increased level of activity and interest in ILS casualty space, which I believe provides legacy acquirers with the potential opportunity to provide solutions – upfront solutions would probably be of most interest, to help support the development and growth of this ILS casualty space.”

As the ILS market explores the potential of creating investment opportunities focused on casualty reinsurance risks there is a need for collaboration to achieve that.

Legacy acquirers and specialist run-off reinsurers have a potentially key role to play, in enabling finality and providing exit opportunities for investors, from portfolios of casualty risk that have been structured and ceded in ILS formats.