The life ILS market is a relationship and network-driven one, which, when compared to other alternative asset classes – including its close cousin, the life settlement market – is small and heavily populated by actuaries, which are in short supply generally.
So, for our poll in February 2023, we wanted to ask Life Risk News readers why they think the space isn’t larger. Three choices were offered; not enough capacity to make it worthwhile, not enough expertise to support an entry, or both.
‘Both’ was the clear choice with almost 50% of the total, not enough capacity second and not enough expertise third.
There is always strong appetite from insurance companies for solutions to reinforce their balance sheets and free up capital, which is what value-in-force transactions – the largest type of deal in the ILS space – provides. But this has been the case for many years now, and growth has been absorbed largely by the existing players. It’ll be interesting to see whether the incumbents continue to absorb any increased demand or whether new players will begin to enter the space.
