The latest Willis Towers Watson quarterly ILS market update found that non-life ILS capital stood at an estimated $88 billion at year-end 2017, a year-on-year increase of 17 percent from $75 billion in 2016.
Willis Towers Watson suggested that this record growth shows that the ILS market was able to withstand the sizeable natural catastrophe losses in 2017 as funds reached out to their investors and risk partners.
Additionally, they suggest the growth is evidence that ILS capital is looking to both the short-term potentially for modestly improved risk spreads and the longer term opportunity to partner with reinsurers, insurers, and insureds to fuel asset under management growth and make insurance more available and affordable.
Bill Dubinsky, managing director and head of ILS, Willis Towers Watson Securities, commented: “We see no end in sight to ILS growth. The ILS community is signaling that it is ready and open for business.”
“2018 is shaping up as a brutal battle for market share between, on the one hand, incumbent reinsurers and ILS investors trying to both maintain their positions and exact some rate increases and, on the other hand, other ILS investors and reinsurers trying to stake a claim to participate in additional risk.”