Defined Benefit

Five frequently asked questions about insurance-linked securities

This paper aims to address some of the questions that our insurance-linked securities (ILS) team is frequently asked by prospective clients. It is not intended to be an introduction to the asset class but rather to answer some of the questions that almost invariably come up once people have started considering ILS as a potential investment. They are questions that need to be addressed before investors take the next step of deciding whether ILS should be added to their portfolio and, if so, what type of strategy would be most suitable.


Tim van Duren

Tim van Duren

CFA, Product Manager Insurance Linked Securities

  1. What is the size of the ILS market?
  2. Are ILS exposed to the credit risk of the issuer?
  3. Could issuers offload their bad risks onto the ILS market?
  4. Does climate change have a negative impact on ILS?
  5. Has the opportunity gone? Is it better to wait till yields have risen?