ILS benefits from better discipline: Fermat Capital

The insurance-linked securities (ILS) segment of the market has benefited from the focus on underwriting discipline, rate adequacy and terms and conditions in recent years, according to Joanna Syroka, director of New Markets, Fermat Capital Management.

She offered APCIA Today a preview of some of the likely topics of a conference session on October 7 titled “Current trends in reinsurance” set for 11am. The panel will cover current trends within the global reinsurance marketplace. “I will be sharing my thoughts on the opportunities and challenges from the ILS capital markets point of view,” Syroka said.

On the subject of the renewed focus on underwriting discipline, she describes this as “a much needed and healthy development for the insurance and reinsurance marketplace”.

“Investors and reinsurers are in alignment on this point. The upside is that the reinsurance market including ILS, and the re/insurance industry as a whole, is now in a better place to support sustainable and scalable insurance growth going forward and to manage whatever challenges and opportunities the future holds.”

One potential challenge for the market is always the threat of a big hurricane loss, but Syroka is practical on its implications for the ILS markets. “ILS market spreads are a function of supply and demand. A big industry loss, whether from a hurricane or any other peak peril, would obviously have an impact on supply. 

“But no matter what happens between now and the renewals, I believe the focus on underwriting discipline—from both reinsurance and capital markets—will remain,” she said.

“We will be discussing many topics pertinent to today’s reinsurance market.”

Jury trends

The session will also cover the casualty side of the market. Syroka notes that the topic of trends in jury awards and their impact on casualty lines of business will be covered by her reinsurance peers on the panel. 

“Casualty ILS is still in its infancy—and focused to date on non-cat opportunities within the casualty segment—so I will be listening closely to what they have to say.”

The session will also have a wider perspective. “We will be discussing many topics pertinent to today’s reinsurance market—from the impact of global geopolitics to severe convective storm losses in the US,” she said.

For more news from the American Property Casualty Insurance Association (APCIA) click here.

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