In this interview with Artemis, Shiv Kumar, President of GC Securities, discussed how investors in the insurance-linked securities (ILS) market benefit from partnering more closely with cedents and providing solutions that address the full spectrum of their needs, rather than focusing narrowly on a single line of business.
In reference to catastrophe bonds, Shiv encouraged investors not to limit themselves to remote, per-occurrence, modellable peak peril covers if they want to remain relevant to cedents.
“There is currently ample capacity in the traditional reinsurance market which is relatively more flexible and constructive around coverage and structure,” Shiv said. “We have seen this dynamic in the cyber ILS space, where the momentum has somewhat stalled due to mismatched expectations between the cedents and investors.”
As catastrophe bond issuance continues to grow, Shiv emphasized the need for efficiency.
“As the rate of issuance grows, the market has to become more efficient to keep pace,” he explained. “This requires that the cycle time for each of the three major components of the process – modelling, documentation and marketing – be reduced so that there is higher throughput in the system.”