The Next Wave of ILS: Casualty Casualty insurance-linked securities (ILS) are transforming insurance financing by allowing insurers to transfer risk to investors, reducing reliance on traditional equity or debt. Initially focused on property catastrophe risk, ILS has expanded to casualty insurance, offering stable, low-volatility returns that help insurers manage capital more flexibly. This shift opens new opportunities for actuaries to create transparent, standardized models that support ILS transactions and scalability. By integrating ILS, insurers can better handle market cycles, reduce earnings volatility, and attract diverse investment, enhancing the industry’s stability and growth.
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