Will insurance-linked securities play a larger role for captives?

The insurance-linked securities (ILS) market has overcome major catastrophe losses in 2017 and 2018, proving to be a reliable risk transfer instrument for insurers. While the market is now growing and expanding beyond natural catastrophe risk, ILS transactions sponsored by captive insurers have been relatively quiet in recent years—but may be poised to grow in the future. In this article, Milliman actuary Aaron Koch discusses the current insurance-linked securities landscape and how captives are using this segment.

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