Video from ILS NYC 2022 conference. Session 3: Differentiated

The third session of the day at our ILS NYC 2022 conference in New York in April saw panellists exploring the availability of diversification opportunities within the insurance-linked securities (ILS) asset class, as well as the maturity of efforts to provide differentiated sources of ILS return.

This video is of the third session from our Artemis ILS NYC 2022 conference, held in New York City on April 22nd, 2022, the largest insurance-linked securities conference in the world since our last in Feb 2020, prior to the pandemic.

More than 200 attendees assembled in New York to hear industry expert speakers under the theme of “(Re)setting the scene”, discussing the future of the insurance-linked securities (ILS) market as the COVID-19 pandemic abates and the industry adjusted to another year of catastrophe losses.

This was the third session of the conference and featured a vibrant discussion on the topic of why the ILS market needs to become increasingly differentiated, in order to offer investors choice and ensure it can meet ceding company needs. As well as how much progress is really being made in expanding the ILS asset class into new classes of insurance and reinsurance business.

The session was moderated by Stephan Ruoff, Head of ILS, Schroders Capital. Participants were: Brittany Baker, Director – Technical Sales in Growth, CyberCube; Rob Hauff, Portfolio Manager, Vesttoo; and James Lee, Managing Director, Aspen Capital Markets.

The full video is an hour long and there are some excellent insights to be gleaned by listening to the expert speakers, who shared insights into what is working right now for the ILS market, as it explores new areas of differentiation, as well as what is coming next.

Moderator Stephan Ruoff, of Schroders Capital, set the tone for the discussion, “The availability of non-cat risk is already there. Think about it, we have a huge mortgage risk transfer space that’s grown over the last years very, very significantly. We have a life ILS space where we transfer mortality, morbidity risk already today, also, to some extent, longevity risk. We have seen new vehicles that are specialty casualty focused. We have seen run-off opportunities for investors and we’ve seen large institutional investors who have taken a different route into insurance investing, by either taking equity, taking funds at Lloyd’s, or other means. Another example there is the London Bridge initiative that’s been set-up to make funded Lloyd’s investing more attractive.

“So, I would argue, we’ve already started seeing a quite differentiated offering.”

Baker, of CyberCube, naturally discussed the increasing profile of cyber risk as a category of business for ILS investors.

“There really is a lot of room for innovation here,” she explained. “Not just thinking about that one big umbrella of cyber risk and having to understand everything that goes into it at one time, you can make these transactions or structures quite complex, if you wanted to, but you can also simplify them, and start with one small niche piece and grow over time, as investors get more comfortable with that peril.”

Hauff, of Vesttoo, explained how his firm envisions leveraging technology to simplify and smooth the transfer of a broad range of risks to the capital markets.

“In terms of vision, I think, simply put, to provide a differentiated offering that expands the ILS investor base, is going to be crucial. Providing multiple entry points for investors to participate in these products is going to be vital and expanding capacity to cedents in a variety of different lines is going to be of utter importance,” Hauff said.

“Having a strong technology backdrop to all of this, that speeds up business process, makes it more efficient, and provides what I would deem to be attractive, stable returns to investors, is all part of the vision,” Hauff further explained.

The final panellist, James Lee of Aspen Capital Markets, said that his company is already matching third-party investor capital with many of the insurance and reinsurance business lines it underwrites.

Looking to the future, Lee said, “Even though we’re talking about products outside of our core area of discussion of cat, we should use thoughtful engineering to develop better products that meet the needs of cedents and investors. If I think about that as the thesis, we could look at new lines of business, that’s an easy one, that’s a greenfield opportunity.”

The full video interview is embedded below and can also be viewed in full, along with previous Artemis Live video interviews, over on our YouTube channel.

You can also listen in audio to all of our interviews by subscribing to the Artemis Live podcast here.

All of our Artemis Live video interviews have a focus on reinsurance, ILS and the efficiency of risk transfer and can be accessed directly from our YouTube Channel.

You can also listen in audio to these interviews by subscribing to the Artemis Live podcast here.

Thank you to all of the kind sponsors of our ILS NYC 2022 conference for their support. For all enquiries regarding sponsorship opportunities at future Artemis events please contact us.