Lloyd’s of London managing agents are supportive of increasing the use of insurance-linked securities (ILS), according to a survey from the Lloyd’s Market Association (LMA).
Senior executives from 25 managing agencies were polled by the LMA following an event in May, with 80 percent responding that they would “like to see ILS products become a permanent fixture in the reinsurance market”.
The survey also revealed that over two-thirds of respondents see a potential use for the UK ILS framework in the next 12 months.
Some 60 percent would like to see Lloyd’s Central Fund diversify its sources of capital through ILS, while 100 percent believe ILS transactions will widen to cover an increased variety of risks, such as cyber and legacy business, in the next three years.
Additionally, 88 percent of respondents would like to see London leverage its underwriting expertise to gain access to currently uninsured risks using ILS capital, and 36 percent believe that Lloyd’s framework will need to change to accommodate more use of ILS.
LMA director of finance and risk, Ken Curtis, commented: “This research shows that market participants are extremely supportive of increasing the use of ILS generally, and doing so at Lloyd’s in particular.”
“The new UK framework has already been tested by a Lloyd’s syndicate, and the market will explore ways to make future transactions even simpler and more efficient.”
